The crisis behind the NSEL (National Spot Exchange) is getting more and more murky.
The Exchange released client positions behind the 24 members who “owe” the exchange 5600 cr. rupees. These clients are the actual companies that have done one leg (selling goods in the T+2 contract) and who have defaulted on the reverse leg (buy goods back in the longer term (like T+36) contracts).
Now, Sundaresha Subramanian (who is a rock star when it comes to NSEL revealing journalism) has found that one “client” of Mohan India (a member), Mangla Shree Properties, which owes Rs. 720 cr. to NSEL, has an address which is now a multi-storyed mall.
Further, Mohan India’s director, Jagmohan, owns 1.33 lakh shares in Mangla Shree Properties, which Mangla Shree’s promoter Anil Mangla has categorically refuted earlier.
And the, the audit by Swiss SGS shows that warehouses of NSEL have less than 1/5th the stock they are supposed to have. And to increase the suspicion that this was a fraud on a massive scale, SGS was refused entry into some warehouses which are within the premises of the borrowers.
How incompetent was NSEL to let a counterparty actually control the goods and warehouses? Since the counterparty is not known to a buyer, it was NSEL’s responsibility to have kept goods in their own warehouses, or employed techniques to provide adequate inventory.
Or, was it completely aware of the goings on?
If we have to tell, we need a CBI investigation, at the very least. People demand CBI investigations routinely, even if a certain Ms. Gandhi’s puppy were to lose a toenail ahead of time. Yet, nothing when it comes to the vanishing of Rs. 5,600 cr.?
There are many related parties in the list of companies. One “member”, Juggernaut Projects which owes Rs. 220 cr., has a director named “Bethamcherla Venkata Hari Prasad”.
Mr. Prasad is also a director of BSPN Exports (named as a client of Spin Cot Textiles, a DIFFERENT member) owing Rs. 40 cr.
Mr. Prasad is also a director of VBG Infrastructure, who is a client of both Juggernaut and another member, Aastha Minmet.
We already know that the Exchange’s ex-chairman, Shankarlal Guru is the father-in-law of one of the defaulters (NK Proteins)
ET has more details on who’s-who.
This is a story of lies and deceit that is now brazen. And still, we haven’t seen a single arrest.