Mumbai Police seeks proof of trades from Sebi in Rs 55-bn NSEL scam probe

Hours after registering a First Information Report (FIR) in the Rs 56-billion National Spot Exchange (NSEL) scam, the economic offences wing (EOW) of the Mumbai Police wrote to the Securities and Exchange Board of India (Sebi) asking for proof of illegal trades.

The FIR was registered on Saturday, against 300 brokers and trading members of the now-defunct NSEL, including some well-known names, for illegal trading in contracts on the spot exchange platform. "We registered it under the erstwhile Forward Contract Regulation Act (FCRA), which was repealed on 29 September 2015. Under the law, we had to file the FIR within three years of the repealed FCRA. Since the last due date was going to expire, we were in a hurry to file the FIR. We have written to Sebi to present proofs for the same," said a senior EOW official. The police have asked for the relevant material to be sent in four days.

According to sources, around 550 cases have been filed in the scam since 2013. "This case is different from the earlier FIRs. Earlier cases were filed on siphoning of funds by NSEL defaulters. The company's promoters were also brought into the cases. This case was filed for illegal trading, which we have to prove under the FCRA," said the official.

 "We are also looking for proofs from the server we have in our office. Also, we had recovered some software and hard disks from NSEL, also under the scanner. We have written to Sebi seeking detailed proof of illegal trading in NSEL contracts. There are chances of some names being repeated in both cases. In those cases, such trading members would be dealt under both acts separately," the official added. The Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act had been invoked in the earlier variety of cases.

On receiving the evidence it has asked for, the EOW plans to send a summon to each NSEL member named in the list.

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