Tuesday, 19 April 2016

FTIL Merger with NSEL Overrides Fiscal, Legislative Prudence 

In a case that has evoked much public interest, authorities have finally decided to venture into areas that should have been investigated long back. This relates to the NSEL case wherein Bombay High Court Panel has ordered audits into investor claims following discrepancies in figures submitted by various stakeholders.
Quite in line with Jignesh Shah’s position on the issues, investigators have found fresh evidence suggesting black money being laundered by companies considered sister concerns of brokers who traded on the platform.
"It has also been alleged that funds of sister concerns of brokers, which could have been derived from illegal sources, were used to trade on the NSEL platform with an intent to legitimize the said funds, which amounts to money laundering," a senior investigating official said.

Noteworthy in the case is an interim order of the HC panel which states, “The committee while processing the claims received from various investors noticed large scale discrepancies between the claims set up by investors vis-à-vis the data submitted by NSEL. Even the discrepancies in Permanent Account Number were noticed.” The order further stated that no reservations be made regarding sharing of information for verification of claims.

Complaints against brokers have also been made in the past relating to false assurances, misrepresentation, trading without client’s authority, modification of client code and selling contracts as investment vehicles. There is also a case against NSEL brokers and traders alleging creation of fake ledger accounts in the name of the clients without obtaining their consent.

A senior regulatory official commented on the case calling it unique as brokers themselves appear to be investors. This again is in line with Jignesh Shah’s stand on the issue and something FTIL has been vocal all along.

Taking into account the role played by brokers, the investigation seems to be shaping up as a bottom-up enquiry. Though a bit late in the day, it could spell be the difference between 63k shareholders of FTIL victimized by executive overreach or upholding of fiscal, legislative and judicial prudence.


No comments:

Post a Comment