SEBI’s probe reveals involvement of top brokers in NSEL scam

Mumbai: Stock Exchange Board of India, on Wednesday, decided to issue a show cause notice to top five brokers who are trading in defunct Mumbai based National Spot Exchange.

The market regulator in the investigation has revealed the names of Motilal Oswal, Anand Rathi, Geojit and Philip capital and India Infoline companies, who according to the SEBI are trading with Jignesh Shah owned spot exchange which no longer exists.

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The NSEL case:

• TheNational Spot Exchange Ltd scam, also known as NSEL fraud, was a planned systematic fraud committed in the commodity market by NSEL, owned by Jignesh Shah in Mumbai.
• The company was promoted by Financial Technologies India Ltd and the National Agricultural Cooperative Marketing Federation of India. Nafed was given 100 shares to b presented as a co-promoter.
• NSEL scam estimated to be a Rs. 5600 crore fraud that came out to light after the company failed to pay its investors in commodity pair contracts after July 31, 2013.
• As many as 13,000 investors from India lost about Rs 5600 crore since the fraud was discovered and it was found that NSEL had neither the money nor the stocks to pay them back.