NSEL money laundering case: ED conducts raids in 5 states under PMLA, action based on fresh evidence

The Enforcement Directorate today conducted fresh searches in five states in connection with the NSEL money laundering probe case, officials said. They said the raids, under the Prevention of Money Laundering Act (PMLA), are being conducted in Delhi, Chandigarh, Ahmedabad (Gujarat), Mumbai (Maharashtra) and Bengaluru (Karnataka). The agency, it is understood, has gathered some fresh evidence and hence is undertaking the fresh action. The Enforcement Directorate, over the years, has attached assets valued at over Rs 2,800 crore in this case. The ED, along with the Economic Offences Wing of the Mumbai Police, had registered a criminal case in 2013 under the PMLA to probe the NSEL and others associated with it. The agency alleged that the accused persons in the said case hatched a criminal conspiracy to defraud investors, induced them to trade on the platform of NSEL, created forged documents like bogus warehouse receipts, falsified accounts and thereby committed criminal breach of trust against about 13,000 investors to the tune of Rs 5,600 crore. It had in March, 2015 also filed a 20,000-page charge sheet against NSEL and 67 others in a court here alleging the NSEL funds were laundered and illegally ploughed into purchase of private properties. NSELs payment troubles started after it was ordered by regulator the Forward Markets Commission (FMC) in July 2013 to suspend spot trade in most of its contracts due to suspected trading violations. The exchange could not settle the outstanding trades, leading to investigations by the police and regulators to find out whether the exchange had defrauded traders by not enforcing rules requiring sufficient collateral to be set aside.