SEBI’s intention to complete the merger of Forward Markets Commission (FMC) by September-end has given fresh hopes to the National Spot Exchange investors, who are fighting a prolonged legal battle to recover their investment of ₹5,600 crore made on the exchange platform.

Sharad Saraf, Chairman, NSEL Investors Forum, said the chances of SEBI representing the NSEL investors’ case in the High Court or with any agency, would have more weightage as it is considered a more powerful regulator than the FMC. “It has sweeping powers to call for any information from NSEL or other investigating agencies and take stiff action against defaulters,” he said.

The forum has sought time with Gyan Bhushan, Executive Director, SEBI, to apprise the market regulator of the developments in the case.

Blaming Financial Technologies promoter Jignesh Shah for the scam in NSEL, Saraf said Shah has deployed a battery of high professional legal experts to defend himself and entangle the government and the investors in a web of legal cases.

Nearly two years after the unprecedented fraud was unearthed in the exchange, the Economic Offences Wing of Mumbai Police, has attached assets worth nearly ₹6,000 crore and arrested 24 suspects including NSEL officials, directors, defaulters and brokers. But all the arrested officials are out on bail and none of the assets have been sold.

NSEL’s allegations

In a note to SEBI, the NSEL Investors’ Forum has highlighted that the auditor of NSEL, Mukesh P Shah (who was an internal as well as statutory auditor of NSEL), is an uncle of Jignesh Shah, Promoter of FTIL, and operates from an address that is also registered address of LaFin Financial Services owned by Jignesh Shah and his wife.

LaFin holds 21.76 per cent shares in FTIL. This clearly establishes nexus between NSEL Auditor Mukesh P Shah and FTIL promoter Shah, it said.

However, FTIL and its promoters have denied the claims of investors.

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