NSEL ex-CEO affidavit confirms that the body was a platform to borrow and lend money

On September 11, Headlines Today/Aajtak had published an exclusive findings of Mumbai income tax department that, "NSEL was nothing but a trading platform used by management, brokers and defaulting companies to borrow and lend finance."

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NSEL

A single affidavit of NSEL ex-CEO Anjani Sinha has made investigative officials life a bit easier now. Thanks to Sinha (who is now saving his own skin and spreading entire blame game on others including top management), skeletons have started tumbling out from NSEL cupboard.

On September 11, Headlines Today/Aajtak had published an exclusive findings of Mumbai income tax department that, "NSEL was nothing but a trading platform used by management, brokers and defaulting companies to borrow and lend finance."

Our reports highlighted, how buying members were using NSEL platform for running their business, diverted funds in real estate and if ED sources are believed that there is also a high possibility that investors money might have been transacted to companies based outside the country - a clear case of money laundering.

Findings with IT department had also said - that top brokers like Motialal Oswal, Anand Rathi, IIFL and few others had information about illegal activities taking place within NSEL, however, later MOSL denied this allegation.

On the same day (Sept 11), Anjani Sinha had filed an affidavit which was handed over to FMC, the Economic Offence Wing (EOW) of Mumbai police and other investigative agencies - taking entire blame on himself and also spreading it across the board naming some specific names and sharing some specific details on how NSEL has cheated its investors.

The affidavit exposed the underbelly of NSEL's dealings over the past few years, how its business model changed from a delivery-based trading platform to more of a financing model and how the platform was extensive misused by its members in collusion with NSEL management to raise funds without trades being backed by adequate stocks at the spot bourse's warehouses.

Sinha's affidavit says, "Besides, some of the buyers have used such funds for some other activities such as extension of their plants, investment into real estate and may be for other activities too."

In his affidavit, Anjani Sinha has highlighted specifics like how defaulting company Mohan India Pvt Ltd allegedly given Rs 18 lakh (dated 11 Feb and 22 March) to NSEL's former assistant vice president of business development - Amit Mukherjee and his wife Bonhi Mukherjee.

Sinha also disclosed that Jai Shrivastava, a director of Mohan India in a meeting in Delhi on 7 September had given Rs 35 crore to Amit Mukherjee, party in cash and part in cheque. In his affidavit, Sinha said, "I also came to know that in course of visits to Delhi, Amit Mukherjee was using high-end cars like Bentley, Porsche, etc, and stay at Hotel Radisson Blue (owned by Mohan India)."

Sinha blamed another officer of NSEL - Jai Bahukhandi, for purchasing a high end SUV costing around Rs 17-18 lakh around 4-5 months back. Bahukhandi was serving as the assistant VP (warehousing) for NSEL before the entire management under Sinha was overhauled.

In the entire affidavit, Sinha has given almost clean chit to top management and promoters. Surprisingly, while holding himself and his management responsible for subverting the bye-laws of the exchange, Sinha said that NSEL's directors and promoters were in no way responsible for the crisis.

Well, this is debatable aspect of this entire affidavit. How can a chief executive officer and his entire management could be hand in glove with defaulting companies in this Rs 5,600 crore payout crisis - without informing or communicating with its promoters ie. Jignesh Shah.

Should the country and all those 13,000 investors believe what Anjani Sinha is saying on paper.

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