The Maharashtra Protection of Interest of Depositors (MPID) court has extended the judicial custody of three commodity brokers till March 20 for their alleged involvement in Rs 5,600 crore scam at National Spot Exchange Ltd (NSEL).
Last week, Mumbai police’s Economic Offences Wing (EOW) had arrested Amit Rathi, director of Anand Rathi Commodities and son of veteran broker Anand Rathi; Chintan Modi, commodities vice-president at India InfoLine and CP Krishnan, whole-time director of Geofin Comtrade.
The EOW presented them before the court on Friday where Justice DP Surana, presiding over the MPID court, turned down the bail application by the three accused.
The three officials have been charged with mis-selling NSEL products, cheating, forgery and criminal conspiracy, among other charges.
The EOW is investigating allegations that brokers on the NSEL platform manipulated client codes to mask the true nature of transactions and also allegedly sold NSEL products, incorrectly, promising assured returns.
NSEL is promoted by Financial Technologies (India) Ltd, which is backed by Blackstone and CVCI.
The market regulator Forward Markets Commission (FMC), and some investors affected by the fraud at NSEL which came into light in July 2013, had recommended for the merger of NSEL with FTIL, which has opposed the merger.
Last month, FTIL challenged the draft order in the Bombay High Court. The court ordered status quo and said that it will look into the case after the order is passed by the government.
Earlier this month, FTIL approached the Bombay HC after Ministry of Corporate Affairs (MCA) moved the Company Law Board (CLB), seeking to scrap the board of FTIL
If the merger is completed, NSEL’s entire business, properties but most importantly its liabilities, among others, will get transferred to FTIL, a move which is being protested by the board and recently voted down by FTIL shareholders.
(Edited by Joby Puthuparampil Johnson)