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/
the country sold this to investors of India. The fact was it was probably world' first fictitious commodity exchange and everything was merely on paper including delivery allocation reports and even fake Quality Certificates. Imagine the con! business-standard.com/article/market… 4/
Breaking of the scam: In 2013 when the Department of Consumer Affairs asked NSEL to restrict their trades to 11 days from 25/35 days, there was no investor interest and the ponzi scheme chain where all investors were only playing 'ringa ringa roses' broke suddenly. 5/
On 31st July 2013, NSEL defaulted on outstanding contracts of Rs 5600 crore to 13000 investors. Jignesh Shah on 5/8/13 came on TV and announced all was hunky dory and investors would get their dues in 5 months. His promise was just like his exchange-hollow, bogus and fake. 6/
The exchange neither had commodities nor the money. Most part of the tax-paid monies of investors flew out of the country by hawala to Jignesh Shah's own exchanges in Dubai, Singapore and Mauritius. @dir_ed knew from the day 1 where the money was but dragged its feet unknwon.
The @dir_ed all along knew this but for reasons unknown dragged its feet on going overseas and tracking the hawala funds. May 2014, the investors of NSEL with great hope and faith voted for @narendramodi who had promised help to the investors in 2013 when they hat met him. 7/
Meanwhile Jignesh Shah had also siphoned 1000s of crores from MCX the famous commodity exchange owned by him) which was rigged like a Pakistani cricket match. His own shills traded and looted gullible investors with gay abandon.
indiatoday.in/business/marke… 8/
indiatoday.in/business/marke… 8/
The PWC audit of MCX trades found gross irregularities and insider trading by Jignesh Shah and his group. A court registered FIR on MCX promoters was closed by Mumbai police surprisingly with no action whatsoever. A coy of this report is available here.9/
slideshare.net/deepakshenoy/m…
slideshare.net/deepakshenoy/m…
Quickly after assuming office Ms. @nsitharaman as MOS finance did some honest work and passed merger order between NSEL and their parent company FTIL which had more than 3000 Crs in cash. She also filed at CLB (now NCLT) for takeover of FTIL board. 10/
However she was transferred from Finance to Commerce ministry and the heat on the fraudsters starting cooling down. Very soon the investors felt that the government had no intentions of recovering investors dues and even their own Rs 400 Crores of PSU money looted by Jignesh 11/
Jignesh Shah meanwhile sold his (FTIL's) 27% stake in Dubai Gold and Commodity Exchange (@dgcx) for merely 11 mn US$ (valuing the huge exchange only at around 40 mn US$). Some years back FTIL had sold 1% stake in DGCX for 12.5 mn US$ ( do the math). 12/
A huge amount of money was siphoned through Dubai (believed to be at least Rs 3500 Crores) but the government of India refused to act on this brazen act of fraud. Various letters to ED, Finmin, PMO from NSEL investors only ended in government dustbins. 13/
A huge coterie and cabal of politicians and bureaucrats (active and retired) worked for Jignesh Shah and his group. A cursory look at the board of Jignesh Shah's company can tell you they ran anything but a software company. 14/
Soon Jignesh became so brazen, he sold even assets attached by EOW of @MumbaiPolice. At this time there was BJP government at the center and the state. After various meetings of NSEL investors with @Dev_Fadnavis ji it looked the CM wanted to help, but somehow he could not. 15/
NSEL- an economic genocide as called by EOW, soon started slipping out of the memory of Indians and very conveniently the politicians involved. Hundreds of letters and tens of thousands of tweets by investors to @PMOIndia @FinMinIndia yielded not a single response. 16/
In 2019, the government of India lost its merger order in SC because of weak defense which helped Jignesh Shah immensely. In spite of several requests by investors the AG was not sent to SC to defend an important government order. livemint.com/news/india/sup… 17/
The BJP government which acted with great alacrity in Yes bank and DHFL matters, failed to takeover FTIL board after 5 yrs of legal weak defense which came across as a fixed match to most NSEL investors. 18/
After constant reminders by NSEL investors the government of India did not file a review petition against the merger verdict in May 2019. Surprisingly, they filed it this month after a delay of 374 days which was forthrightly rejected by the hon'ble SC judges. 19/
Where does this leave NSEL victims? No recovery, no trial, Jignesh Shah and his accomplices are free and throwing 5 star parties. All attached assets freed by Jignesh Shah and his company FTIL. Government not interested in recovering own PSU money form this fraudster. 20/
This government which dreams of 5 trillion economy doesn't protect its own Indian investors but dreams of attracting foreign investment amid such lawlessness and crony capitalism? Who will invest in India when our system is up for sale to the highest bidder? 21/
Mr. Modi becomes seasonal chowkidar during election times but refuses to listen to #MannKiBaat of cancer suffering NSEL fraud victims. Such heart-rending letters form desperate families were never responded to by the man who calls himself 'Pradhan Sevak' (the first servant). 22/
The Right Wing of India which claimed to stand against corruption refused to speak a word against Jignesh Shah and this government's inaction on this fraudster. Leading RW handle like @rishibagree who himself is an NSEL victim, refused to speak word against this government. 23/
All in all, what does this prove? If you are a 5600 Crore fraudster in India and magnanimous enough with your loot (agnostic of politics), you are above all laws. The 1000s of crores you've parked outside India, will remain safe and you can bully and crush the victims. 24/
At least 60 investors have died begging to @narendramodi in last 6 yrs for justice. Many lost their houses, some lost their retirement savings, some lost their daughter's wedding kitties. However, nobody gives a toss as we investors of India do not make a vote-bank. 25/
