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Today is the 7th anniversary of Rs 5600 Crore (about a
billion $ then) brazen commodity fraud called 'NSEL scam'. It's also a sordid saga of dishonorable handling by the government of fraud and corruption of a dishonest and dissolute businessman who's been buying his freedom. 1/
billion $ then) brazen commodity fraud called 'NSEL scam'. It's also a sordid saga of dishonorable handling by the government of fraud and corruption of a dishonest and dissolute businessman who's been buying his freedom. 1/
The scam: Jignesh Shah floated a fake exchange (national Spot Exchange Ltd- NSEL) only on paper, right under the nose of the government and colluding babus.There were commodities traded and investors were offered arbitrage of about 13% p/a. Example-an investor could buy Sugar 2/
at 40 Rs/Kg (T+1)and sell next month's Sugar contract (T=25) at Rs 40.50/Kg at the same time thus locking 50 paisa on his 40 Rs. There was no speculation here and it was a pure arbitrage trade (at least on paper).Even Govt PSUs like MMTC-PEC invested heavily and top brokers of 3/
