This document summarizes key discussions from a meeting to review actions taken on recommendations regarding the National Spot Exchange Limited (NSEL) crisis. The meeting discussed progress by various agencies. The Mumbai Police reported attaching over Rs. 6,200 crores of assets, including brand values. Four court cases related to the crisis were also outlined. However, concerns were raised that more needed to be done to actually recover funds for investors. The Mumbai Police and other agencies were asked to further expedite the process.

1. Ministry of Finance
Department of Economic Affairs
Commodity Derivatives Markets Division
Meeting held under the chairmanship of Hon'ble MOS(F) to review the status of
National Spot Exchange Limited (NSEL) issues.
Summary Record of Discussion
1) A meeting was held under the chairmanship of MOS (F) at 6.00 pm on 20/1/2015
at North Block to review the status of NSEL issues. List of participants is annexed.
2) Chairman welcomed the participants to the meeting. He stated that resolving
NSEL crisis is one of the major issues being confronted by the Government and
coordination of all the agencies is essential to achieve desired results and restoring the
confidence of investors. This was followed by a detailed discussion on the actions
being taken by various agencies. MOS (Home), Government of Maharashtra elaborated
on the steps ta�en by Maharashtra Government for appointment of additional
Competent .Authority, constitution of designated court for NSEL, strengthening of
Economic Offence Wing etc. Additional Commissioner, Economic offence Wing,
Mumbai Police also made a detailed presentation on the subject. Secretary, MCA
elaborated the current status on the draft merger of FTIL and NSEL and the legal
proceedings thereof. ED explained the position relating to the investigation by his
agency.
3) In conclusion, the following actions were decided:
(I) Government of Maharashtra will help in strengthening Economic Offence
Wing to deal with the NSEL case. Specifically the following steps will be
taken:
a) Appointment of an additional 'competent authority' to quickly take up the
disposal of assets.
b) Constitute another designated court for hearing of NSEL case on priority
basis.
c) Appointment of valuation companies and auctioning house of repute to
ensure speedy disposal of assets in a transparent manner.

2. d) Publicize the actions initiated in expediting the refund of due amount to the
affected investors so as to restore public confidence in the system.
11
1) Government of Maharashtra to move application for clubbing of the cases.
filed in di�erent states to avoid delays in multiple suits. Government of India
will support the step, if needed, by the Government of Maha�ashtra.
l;:•, Department of Revenue and Enforcement Directorate to ensure speedy
disposal of assets attached .b{the ED ana cons1de·(necessary amendment to
PMLAAct.
(IV) Department of Revenue to examine release of Rs. 59 crores seized by
Income Tax Department.
(V) Ministry of Corporate Affairs to defend the case regarding merger/
amalgamation of NSEL with FTIL in expeditious manner before the High
Court of Mumbai.
�'.'I) Department of Economic Affairs to take up the issue regarding outstanding
dues of NAFED with Ministry ofAgriculture.
4) Meeting ended with a vote of thanks to the Chair.

4. REVIEW MEETING RELATING TO THE IMPLEMENTATION OF THE
, RECOMMENDATIONS OF THE SPECIAL TEAM OF SECRETARIES (STS) ON THE
NATIONAL SPOT EXCHANGE LIMITED (NSEL).
Summary Record of Discussion
A meeting to review action taken on the recommendations of the Special Team of
Secretaries (STS) to examine the violation of laws and regulations by NSEL or any associated
company or any of the participants was held at 03.00 PM on 02.03.2015 in the Committee
ma. Room No. 41, North Block, New Delhi under the chairmanship of Additional Secretary (Inv.).
The list *of participants is annexed.
2. After welcoming the participants, the Chairman expressed concern that nothing
significant appears to be happening for refund of the money of the investors of NSEL. The
investigation process is not reaching the point where the investors can be given relief through
the refund of invested money.
3. The Chairman desired to know the status of action taken by Government of
Maharashtra regarding the decisions taken in the last meeting held on 20th January, 2015
under the chairmanship of MOS (Finance). He expressed displeasure over the absence of the
representative of Govt. of Maharashtra in the meeting. Shri Rajvardhan, Additional
Commissioner of Police, EOW, Mumbai informed that a follow-up meeting under the
chairmanship of Hon'ble MOS (Home) Govt. of Maharashtra was held in this regard in
January, 2015 after the meeting taken by MOS(Finance), GOI. However, he was not aware of
the further action taken by the State Govt. on the decisions taken in the meeting of MOS(F),
*NW GOI.
4, Shri Rajvardhan informed that the Government of Maharashtra, MPID court and
Mumbai Police, EOW, are the three organic components of the system which are working for
attaching the property and disposing off the same within the ambit of the law. After the
investigation by the EOW, MPID court has started taking action. In the meantime, Bombay
High Court has constituted a Committee to look into the issue of how property can be
disposed off. This has perhaps been causing confusion in the MPID court as to how to
1

5. proceed in the backdrop of thi•formation of a committee by High Court to look into
the matter.
5. The Chairman intervened stating that for expediting the recovery, it is necessary that
Government of Maharashtra may request the Advocate General to appear before the Court
for pressing the need to accord due priority to the disposal of the case. Chairman, FMC,
remarked that the action of the Bombay High Court in forming a committee is in no way an
impediment in the faster proceeding by the MPID court as the former action is independent •
and in parallel.
6. The Chairman advised that a draft letter may be put up from Hontle Minister of State •
(Finance) to Chief Minister, Maharashtra immediately to ask Government of Maharashtra,..„4-
expediting the process of the recovery of the invested fund by disposing of the attached
property of the defaulter. Adviser (CD) informed that the file has already been submitted to
MOS (F) in this regard.
7. Shri Rajvardhan drew attention towards three issues. First, the Income Tax
Department has confiscated t 59 crores of one defaulter Company- viz. Mohan India Pvt.
Limited. The MPID court had directed the IT Dept. to release the amouht of 59 Crores. The
EoW has also requested the IT Department to release the amount. The IT Deptt. has
however not refunded the money. AS (Inv.) desired that the matter may be taken up with
Department of Revenue separately.
8. Shri Rajvardhan also invited attention towards the action of ED in attaching the
properties of the defaulters which is coming in the way of the EOW in processing the case for
dealing with such attached property of the defaulter. Shri S W Naqvi of E.D informed that the,
confiscated property of Mohan India Limited is outside the preview of the settlement'
agreement listing the property for sale for NSEL dues. Therefore, there is no reasor hy
EOW cannot attach and dispose off other such properties listed in the settlement agreement.
9. Shri S.W Naqvi of ED informed that ED has passed fifteen attachment orders for
properties worth 481.79 crores. Out of these 15 orders, 10 orders have already been
confirmed by adjudicating authority.
10. Advisor (CD & CM) requested to know as to how long it will take for the ED to liquidat€1
an attached property in view of the proposed amendment in PMLA as brought in Finance Bill
2015. Shri Naqvi explained the prescribed time frame for different processes starting fror
2

6. attaching the property of the defaulter to the O0ifli of its disposal. However, he could not
spell out any definitive time frame.
11. The Chairman stated that in the back drop of the proposed amendment in PMLA as per
Finance Bill 20.15, the process of drafting the Rules under the Prevention of Money
Laundering Act may be initiated so that by the time the Finance Bill, 2015 is passed, the draft
Rules are ready for notification.
12. As for the third issue, the Economic Offence Wing of the Mumbai Police has received
several complaints against broking houses. There are 139 brokers which is huge no. and
EOW is not in a position to tackle the mammoth task of probing into the complaints against
139 broking houses. Therefore, it would be in the interest of timely administration of justice if
FMC also concurrently takes action against such broking houses. While replying to a query in
this regard, he stated that though the letters of complaints of aggrieved investors can be
tagged into the FIR lodged by the Mumbai Police, it would be in the fitness of the things if
FMC takes action on the complaints under the provisions of the FCRA.
13. Chairman, FMC informed that in the beginning itself i.e., when the NSEL payment crisis
case came to the fore, FMC circulated two volumes of complaints and related papers to every
investigating agency for necessary action. As for the complaints against braking houses, the
FMC has not yet been provided any such complaint by the investigating agency. Therefore, if
EOW so desires, it may give a copy of the forensic report to the FMC for action. Shri
Rajvardhan regretted that the laws do not permit sharing of forensic report in such matter.
However, EOW may not have any objection to sharing names of prominent broking houses
with FMC and SEBI which can conduct independent enquiry against such alleged defaulting
broking houses.
14. Shri Prabodh Kumar, Joint Director, CBI informed that they are working on 3 cases,
out of which 2 regular cases (against MMTC and PEC) have been registered. In the third case,
Preliminary Enquiry is being made with regard to the exemption given by the Department of
Consumer Affairs to NSEL under section 27 of the FCRA.
15. Dr. Navrang Saini, MCA informed that based on the suggestions of the Forward Markets
Commission (FMC) and the Department of Economic Affairs, the MCA issued a draft order on
21.10.2014 under section 396 of the Companies Act, 1956 proposing merger/ amalgamation of
NSEL with FT1L. As per the provision of the Companies Act and direction of High Court, steps
as required under the provision of the Section 396(4)(b) of the Companies Act, 1956, are being
taken before the merger shall actually take place. However, the Bombay High Court had
initially given a stay on the merger issue. The Court has now ruled that the government can

7. first pass the final order and the aggrievod party can then challenge it legally. MCA is under
process 10 finalize the order. which is likely lo Le finalized by around 7"' April. 2015.
:16. Ms. Deepika Mittal, Additional Director, FIU staled that a show-cause notice has been
issued to NSEL in January, 2015 for non-compliance with the provisions of the Prevention of
Money Laundering Act. As the proceedings under section 13 of PMLA are quasi-judicial, FIU
sought certain clarifications. On these issues, desired clarifications had been received by FIU
on 24.2.2015 and the matter is under examination for further course of action. To enable
them to process the case further, they need certain documents from FMC and Department of
Economic Affairs. The Chairman directed that the Commodity Derivatives Markets
Division/FMC to provide the requisite information to FIU immediately.
17. Chairman, FMC said that some money is recoverable from NAFED, which needs to be
recovered at an early date so that the investors could be granted relief by the recovery of
fund from NAFED. Advisor (CD & CM) informed that the matter has already been taken with
the Secretary (Agriculture). Their response is still awaited.
18. While concluding, the Chairman re-interated that the Government of Maharashtra has
a key role to play in this case. Therefore, they may be again reminded to ensure taking
necessary action on points decided in the meeting taken by MOS(Finance) on 20th January,
2015.
19. The meeting ended with the thanks to the chair.
*****
4

8. ANNEXURE
LIST OF PARTICIPANTS
Ministry of Finance, Department of Economic Affairs
1. Shri Ajay Tyagi, Additional Secretary (Investment)
2. Dr. C. K. G. Nair, Adviser (CM)
3. Shri Lekhan Thakkar, Director
4. Shri Praveen Trivedi, OSD(Law)
- Chairman
Forward Markets Commission
Shri Ramesh Abhishek, Chairman
Ministry of Corporate Affairs
Dr. Navrang Saini, Director (Inspection & Investigation)
Economic Offence Wing, Mumbai Police
Shri Rajvardhan Sinha, Additional Commissioner
Central Bureau of Investigation
Shri Prabodh Kumar, Joint Director
Enforcement Directorate
Shri S.W. Naqvi, Addl. Director
Financial Intelligence Unit, India
Ms. Deepika Mittal, Additional Director
5

10. REVIEW MEETING RELATING TO THE IMPLEMENTATION OF THE
RECOMMENDATIONS OF THE SPECIAL TEAM OF SECRETARIES (STS) ON
NATIONAL SPOT EXCHANGE LIMITED (NSEL)
Summary Record of Discussion
The seventh meeting to review the action taken on the recommendations of the
Special Team of Secretaries which had been set up to examine the violation· of laws arid
regulations by NSEL or. any associated co,�pany or any of the participants, was held at
04.30 pm on· 12.06.15 in the Corr:imittee Room No. 131-A, North Block, New Delhi under
tl1e chairmanship of Additional Secretary (EA). The list of participants is annexed.
2. The Chairman welcomed the participants and informed that owing to unforeseen
engagements, Finance Secretary _could not make it to the me_eting. While emphasizing
th� need to hglp. the investors of NSEL in _getting bac�. their _i_nvestrrients withou.t fur:ther
delay, he highlighted the vital role of the Mumbai Police in the matter of recovery of the
lost investments as well as prosecuting the offenders. He requested its representative
to apprise about the actions taken in this regard.
3. Shri Dhananjay Kamlakar, Joint C.P, Economic Offence Wing(EoW) of the
Mumbai Police replied in response that during the course of the investigation, EoW has·
attached, under MPID Act, 437 immoveabie assets, 239 bank accounts, 24 demat
accounts etc. worth Rs. 6204 Crores. Such assets include brand value of Dunar Foods
(Rs. 600f Crores) and 11rupati Brand of NK Proteins (300/-Crores). Tnese brands have
been
·
frozen by sending a. letter to the Commissioner of Patents. He ·aoded that the
process to dispose· of these. properties under the provisions of MPID Act is at very
advance stage. Report cif the forensic audit is also being utilized to ·serve the purpose.
4. With �egard to matters·pending·in different Courts, ·shri Kamlakar informed that
· anticipatory bail application of
_
the··.Director of Aaslha Minmet Mohit Agarwal is pending

11. !
in the High Court. As per the direction of the High Court, the valuation of property at
Titwaia, Than·e of the accused Mohit Agarwal has been completed with the help of NSEL
which comes to Rs. 54 Crores. In addition, hearing of anticipatory bail application of the
Director of NK Proteins Pvt. Ltd. Nimish Patel is pending before the High Court. Besides,
the NI< Proteins Pvt. Ltd., M/s Yathuri Associates and M/s Lotus Refineries .Pvt. Ltd.
have filed quashing petition befor_e the High Court.
5. Financial Techn_ology (India) Ltd. has filed Criminal Writ Petition in Bombay High
· Court challenging the notice _under MPID Act issued by EOW directing not to dispose of
companies assets. Besides this the NSEL has i:!lso filed another Criminal. Writ Petition
challenging the applicability of the MPID Act in the case of NSEL. ·There are about ·45
Miscellaneous Applications filed by different persons/companies ma.inly for de-freezing
their bank accounts, relaxing conditions of bail etc. pending in MPID Court. Four
companies have filed civil writ petitions in Chandigarh and Ahmedabad High Courts for
. sfaying ·the operations of notices issued to secure their assets under the.provisions of
MPID Act.
6. . With regard to the attachments, Shri Kamlakar informed that attachment df
property worth Rs. 3400 crore have been notified in the _Gazette. As for the rate,·he
darified that all the' rates quoted ,are·" general" rates which- are sut;lject to- .proper
evaluation.by the valuer. So far, orders have. been received to dispose. of only two
properties worth Rs. 92·.lQ crore, which are now ripe for bidding. So far, bidding has
taken place for the property worth � 56 crore.
7. Shri Kamalakar informed that there are 9 warehouses wherein commodities such
as raw wool; paddy, soya steel; ferrochrome etc. with expected value of Rs. 110 Crores
are lying. NSEL is taking legal recourse to sell these commodities. So far, the NSEL has
filed two applications in the MPID Court for release of commodities of M/s Metkore
. . Alloys & Industries Ltd.. (Ferrochrome worth_ Rs. 92 Crores) and M/s· Shree Radhey
Trading Co. (Red Chilly and pepper worth Rs.. 10 Cr6res), The Competent Authority has
.
subrTJitted a proposal in the_ Court to.auction the same.· Tlie MPID Court. h�s granted
permission to the NSa to auction the commodities of M/s Me.tkore Alloys & Industries
Ltd..and therefore, NS�L has invited bids to auction the same. ·
8.. Shri l<amalakar said that till date, 608 investors, who .had invested an· amount of
R_s. 2 lakhs. and l�s have received their full amount. The amount deposited so far by.
these clefaulter"switnNSEC fi
f
R�-363 Crores which has been disbursed to the investors
on pro rata basis.

12. 9. Shri Rame::>n A'ohishek, Chairman, FMC clarified that reimbursement of � 363
crores was effected much earller through the Escrow account being maintalned by the
FMC.
10. Shri Kamlakar further informect that out of 25 defaulter companies, M/s Sankhya
Investment and M/s Topworth Steels & Power Pvt. Ltd. have settled their accounts with
the NSEL by repaying their outstanding amount and M/s· Mohan India Pvt. Ltd.- had
entered _ into settlement agreement_ with the NSEL and agreed to repay an amount of
_ Rs. 770 Crores. This agreement has been ratif
i
ed by the MPID Court. However, since
- the company failed to make scheduled payment, the NSEL has filed an application in
the MPID Court to dispose of its properties. Application is pending in MPID Court, The
company has deposited � 52 Crores till date in the Escrow Account.- Besides, M/s Mohan
India sold sugar lying in their godowns as per Court Order and deposited 't 14.5 Crores
in the Escrow Account.
11. The chairman desired to know as to flow long it would ·take to dispose of the
attached_ properties and realize. jts value for the disbursemen� amongst the investors.
-Shri · Kamalakar replie·d that _it_ would _ become possible to . dispose of the attached
property. after completing the _procedural formalities for the purpose which include the
prerequisite of seeking orders of the MPID Court and the vacation of stay orders, if ariy,
. of any other competent court ·of law. The Deputy Collector(Land Acquisition), Mumbai
City, who has ·been appointed as a Conipeteht Authority under the provisions of MPID
Act for the attachment and disposal-of properties, also attends· to other regular,work in
addition to the NSEL related work. As a result, his attending to the attachment related -
takes time. Under the circumstances, it would not be possible to. calculate any
reasonably accurate spell of time needed to dispose offinally the attached property.
The DIG, CBI stated that cases of such nature generally consume nearly two years.
12. The Chairman expressed the need to take up immediately with the Chief
Secretary, Maharashtra, _the issue of assigning the competent authority NSEL related
work only, in exclusion of any other work. If possible, at least one more MPID court
rnuld be set up immediately to · expedite disposal of the long pending property
attachment/d;
°
sposal work. He hop�d that EoW wouid take .steps to expedite_the
process to provide relief to the investors with9ut further delay.
13. Dr. Ncivrang Sain1, Director(Inspection & Investigation), Miriistry of Corporate
Affairs stuted_that c1s per tl1e orders·dated -04.02.1.5 of the High Court,· Bombay, the _
Ministry · is requiied to consider objections/ · suggestions - received from various
stakeholders on the draft order of the_amalgamation of NSEL with FfIL and finalize the ·
i
i

13. order by 07.04.15. However, the Ministry has received a large number of the merger
related references. For considering it before the finalization of the Order, the Ministry
has been granted time till 31.07.15 by the High co"urt, Bombay.
14. Dr. Saini added that the Ministry has· filed a petition before the Company Law
Board on 25.02.15, under different sections of the Companies Act, against th.e ·
mismanagement of affairs of NSEL by the Board of Di.rectors of TTIL and seeking to
remove the Board of Directors of TTIL and to appoint Government nominees in their
place. The next date of hearing is on 30.06.15;
15. The chairman remarked that if the MCA could succeed in the matter,· lots of r-elief
could 9e expected as a result.
·16. ShrJ S.W. Naqvi,. Special Director, Enforcement Directorate(ED) stated tliat the
ED has filed a prosecution complaint in this case before the City Civil. Court and
Additional Sessions Judge, Greater Bombay _on 30.03.2015 against NSEL and 67 other
accused persons under the PMLA, 2002. Th.e charged· persons· include Board of
Directors of NSEL along with t�e key management pe.rsons. Out of the total 25
defaulting membe.rs, 14 defaulting members and their controlling persons/associates·
have aiso ·oeerf-<:harged··1ri lhe..said complaint. 'The Charge sheet ·details· money trail•,
amounting to Rs: 3721.22 crores. Investigation against the r.emaining defaulting
members is also in progress,
17. So far, out of the 19 Provisional Attachment Orders issued in respect of the
proceed of the crime identified, under Section 5 of PMLA 2002, 13 have already been
confirmed by the PMLA Adjudicating Authority.
18. Dr. Naqvi pointed out that there have be.en cases of the attachment of certain
properties by both the investigating agencies i.e., the ED has attached a few properties
und�r the PMLA and the EOW has .attached the same properties under the MPID Act.
Property of. M/s Mohan �ndia is a point in the case. Such overlapping set qf attachments
are· causing avoidable ccmstraints:
19. The chairman .emphasized the need for the . avoidanc;e of overlapping or such .
actions by the tvvo inyestigating · agencies. He underlined that in the process, the
ultimate objCctiVCS of .recovery of the lost investments and pcnaihlng ff,-e defaulter may.
not be lost sight·· of. It would be·· proper :f it is examined whether the·ccises mi;;ht be
pursued by .the Enforceme.nt Directorate becau·se, as pointed out by tr,e Chair�a�:. FMC,
tile PMl�A has relatively stri1:rPr pro'!i�iOP ff!r ITJ�f:'�ing thF: 0!Jj1-2ctives.. I hr;refon�, i� v,r(1c.
··£#: 'bc7_r:hf1Cf'7:VI-�VY1i1tmt_,. '•·1•$3 riTri' tr

14. r· decided that the ED would see!<. immediatel'f legal advice of the Ministry of Law fl..
asc_erraining whether in the interest of speediei administration of justice, in respect of
the attachments of the same properties being made by ED as well as EoA/ of Mumb2i
Poiice, if such cases can be tried in the courts of law under only PMLA by transferring
also such cases from MPID courts.
20. Shri Ramesh Abhishek, Chairman FMC sought to know whether EOW can share
forensic report so that suitable action can, if so required, could be initiated against the
defaulting firms. Shri Kamalakar however expressed reservation on account of legal
issues involved on the ground that the same ·being made a part of the charge sheet
against the offending firms.
21. Smt. Deepika Mittal, Additional Director, FIU informed that Show Cause Notice
has been issued to NSEL for non-compliance of the provisions of PMLA. They have
sought information about the Board of Di�ectors, key officials during 15.02.13 to
19.09.14 and those who are in position riow. Besides, information relating to brokers
(who are intermediaries under PMLA) have also been sought.
·22. The FIU is examining the NSEL' reply to the �how Cause Notice. However, FIU
is still awaiting the information relating to the Board Members/Directors and key
officials in position during 15.02.13 to 19.09.14. ln response to a query, Smt. Mittal
clarified that under the PMLA, FIU can impose only monetary penalty on the offenders.
23. Shri Madhup Tewari, DIG, CBI informed that they are pursuing 2 Regular
Enquiries and 1 Preliminary Enquiry(PE) in the NSEL related matter. In the PE, roles of
officials of Forward Markets Commission and the Department of Consumer Affairs in the
NSEL payment crisis case are being probed. The PE is nearly 4 - 5 months old.
24. The meeting ended with a vote of thanks to the chair.

16. 8
th
REVIEV MEETING ON IMPLEMENTATION OF THE RECOMMENDATIONS OF
THE SPECIAL TEAM OF SECRETARIES (STS) ON NATIONAL SPOT EXCHANGE
LIMITED (NSEL)
The eighth meeting ,::::
3
:i:�:::o:
f
,:
IB
�:=�ndfilions of ilie Specifil Team·�
of Secretaries (STS) to examine the violation oflaws and regulations by NSEL or any associated 1
compar1y or any of the participants was held at 03.�0 PM on 14.08.2015 in the committee room
No. 131-A, North Block, New Delhi under the chairmanship of Finance Secretary. The list of
participants is annexed.
2. After welcoming the participants, the Chairman desired to know about the·action taken'
by the various agencies, starting with the Ministry of Corporate Affai.rs (MCA) about the merger
of NSEL with the FTIL.
3. Dr. Navrang Saini, Director (Inspection & Investigation) ofMinistry of Corporate Affairs
informed that the Ministry had planned to take a final view on the issue of final Order on NSEL-
FTIL merger by 31.07.2015 after giving brief hearing to FTIL and NSEL on 07.07.2015 and
08.07.2015 respectively. However, the hearings were adjourned for four weeks in compliance of
the directions of the Bombay High Court dated O 1.07.2015. The matter was further heard by
Bombay High Court on 07.08.2015 when it permitted extension of the period of time up to
30.10.2015 for the issuance of the final order on the :nerger by the Ministry. As regards the
petition filed by the Ministry before the Company Law Board (CLB), it was informed that the
CLB, on 30-06-2015, granted interim relief by directing that FTIL will not sell/ alienate or create
third party rights on its assets and investmerits till further orders. I{owever, FTIL filed an
application before .the Madras High Court, .seeking stay on the order of CLB. The Madras High
Court vide order dated 10-07-2015 ordered partial suspension of the CLB order dated 30-06-
2015. The next date of hearing in CLB has been fixed for 02-09-2015. FS stated that keeping in
------------ . - -·-
1

17. ·iew the importance of, and intricacies involved, in the case, the MCA needs to engage-suitable
�nior advocate(s) for defending the case.
4. Shri S.W. Naqvi, SpecialDirector, Enforcement Directorate (ED) stated that ED had filed
prosecution complaint before special PMLA Court, Mumbai on 30.3.2015 against NSEL and 67
other accused persons under the PMLA, 2002. However, trial has not yet started and the
application for transfer of cases from MPID court vould be heard by Special Court on
17/8/2015. He mentioned that EU had issued 19 provisional attachment or<ler::; iu re::;ped uf
assets worth Rs. 837 crore and all these orders were confirmed by the Adjudicating Authority
under PMLA.
5. On a query by the Revenue Secretary as to Vhether there are overlapping sections under
PMLA in the action being taken by ED and the ones under MPID in action being taken by EOW,
Mumbai. Shri Naqvi from ED clarified that while there are no overlapping sections, some ofthe
properties secured for attachment by ED have ,been fou
nd to be overlapping. Shri Dhananjay
Kamalakar, Joint Commissioner, EOW, Mumbai clarified that as per their records, such
overlapping properties are worth Rs. 464 crore whereas ED's estimate for such property is Rs.
203 crore. At this, the Additional Chief Secretary, Govt of Maharashtra requested for
expeditious decision in respect ofsuch properties with overlapping attachments ·by ED as .Vell as
by EOW. AS (I), DEA stated that attached property could be liquidated under MPID Act as
action under this act appears to be faster. Finance Secretary urged that the ED and EOW should
urgently reconcile the overlapping properties and action to liquidate the attached property should
be pri_oritized under such Act which may help speedier reliefto the aggrieved investors.
6. Revenue Secretary desired to know about the action pending, ifany, with his Department.
Adviser, (CM), mentioned that the issue of release of Rs. 59 crore seized by Income Tax
Department is pending. Finance Secretary stated that claims of the sovereign may be examined
as per the prevalent practice and a decision on the matter taken.
7. Shri P. K. Tiwari, Director FIU-India informed that Show cause Notices were issued to
NSEL for non-compliance ofthe provisions of the PMLA read with the Rules made thereunder.
As a consequence of this action, the statutory process of imposing sanctions u/s 13 ofPMLA has
2
--...,,..

18. been 1nitiated. Revenue Secretary observed that FIU's action should have been faster. Explaining
the delay in action on the part of FIU, Shri Tiwari stated that examination of the issue of
'deemed reporting' status of NSEL under the PMLA took time. FS advised that FIU's statutory
proceedings should be expedited to which Shri Tiwari responded by stating that the process is
likely to be completed by September, 2015.
8. Shri K.P. Bakshi, Additional Chief Secretary, Govt. of Maharashtra referred to the
meeting he had with the Chairman, FMC on 10/08/15 regarding some of the pending issues with
the Qovt. of Maharash�.ra to expedite the process of inquiry in NSEL related matters and disposal
of attached properties. He informed that an Additional Collector has been appointed as an
additional Competent Authority under MPID Act for attachment and disposal of properties in
addition to the Deputy Collector (Land Acquisition), Mumbai. Chief Justice, Bombay High
Co in his recent meeting with Chief Minister, Maharashtra agreed in-principle for setting up
of one more special :MPID Court. As regards appointment of auctioneers, he sought to know the
guidelines since they are doing it the first time..FS suggested that one way could be to utilize the
panel of auctioneers available with the Court or evaluators and auctioneers registered with ED
for engaging their services. Shri Bakshi also sought to know as to how the Govt. of Maharashtra
is expected to meet the expenditure in respect of the competent authority and additional staff as
well as services of auctioneers etc. Additional Secretary (I) suggested that since MPID is a State
enactment, Maharashtra Government may follow the rules, regulations and procedures issued
under this A�t. FS suggested that the Govt. of Maharashtra may move an application in the
. Court to get appropriate orders in this regard. As (I) also underlined need for the Government of
, Maharashtra to auction the attached property without further delay so that flow of fund back to
investors could start forthwith. As regards clubbing of cases, Shri Bakshi informed that Advocate
Ge ral of Maharashtra would request all other courts to transfer all NSEL related cases· to
Mumbai High court.
9. It was noted that soon after the NSEL settlement crisis broke out, FMC directed all
regulated commodity exchanges to take appropriate disciplinary measures against defaulting
members of NSEL trading on their platforms as members or clients and also. to prohibit them
rom trading in their exchange platforms. Accordingly, trading/membership rights of defaulting
1embers of NSEL were suspended by various- commodity exchanges. FMC declared Financial
3

19. Technologies (India) Ltd., Shri Jignesh Shah, Shri Joseph Massey and Shri Shreekant Javalgekar
as not "fit and proper" to be Shareholder/Director in the management and the Board of any
Exchange. FMC also filed a complaint dated 16.01.2015 with the EOW, Mumbai requesting
them to take appropriate legal action against NSEL u/s 21 of FCRA. Shri V.C. Chaturvedi,
Director, FMC mentioned that they had received complaints from NSEL against some of its
members/brokers for alleged wrongdoings such as large scale unique client code (UCC)'
mod
.
ifica
�ion, fu
�
ding of trade, false as
_
suranc
�
of high retu
��
etc. and they have called f1..,"·!§i
detailed information from NSEL for tak.mg action as per prov1s10ns of FCRA, 1952. FS state��· · ··
that FMC should have taken action against such brokers/wrong-doers particularly who are;
Members of regulated commodity exchanges based on the facts/ records/complaints. He further
urged that action must be expedited and not to show any leniency on such violations.
10. Shri Dhananjay Kamalakar, Joint Commissioner, EOW, Mumbai reported that properties
worth Rs. 6204.78 crore have been secured for attachment under MPID act. These include 4801
immovable assets, 239 bank accounts 24 demat accoW1t and 23 motor vehicles. Attachment ofi
properties worth Rs. 5500 crore has been notified in the Gazette of the Govt. ofMaharashtra. He,
also ir.formed that 166 new properties have heen identified, in addition, for attachment. AS (I)
observed that some properties should be expeditiously auctioned and a workable time table mayi
be framed to auction attached properties.
11. Concluding the meeting Finance Secretary emphasized·that people who lost their mone 1
must get reliefas early as possible and all investigating and other agencies should expedite the·
actiorr with this goal in mind. This is reflected in the recent set of anguished complain
expressing distress over the long pending grievances by affected investors.and their association�,
12. The meeting ended with the vote ofthanks to the chair.
*****
4
-· rttswrrentun«mzesff c ·t - § - ?arififr

20. ' '
LIST OF PARTICIPANTS
Ministry ofFinance, Department of Economic Affairs
I. Shri Rajiv Mehrishi, Finance Secretary
2. Shri Ajay Tyagi, Additional Secretary (Investment)
3. Dr. C. K. G. Nair, Adviser(CM)
4. Shri K. N. Mishra , Deputy Secretary(CD)
Department ofRevenue
Shri Shaktikanta Das, Secretary
Financial Intelligence Unit, India
Shri P. K. Tiwari, Director
ForwardMar:kets Commission
Shri V. C. Chaturvedi, Director
Ministry of Corporate Affairs
Dr. Navrang Saini, Director (Inspection & Investigation)
Govt ofMaharashtra
Shri K.P Bakshi, Additional ChiefSecretary (Home).
Economic Offence Wing, Mumbai Police
Shri Dhananjay Kamalakar, Joint commissioner
Enforcement Directorate
Shri S.W. Naqvi, Addl. Director
5
*****
· . . ;•....
-- ----- ---------------------------
ANNEXURE

22. .. Government of India
Ministry of Finance
Department of Economic Affairs
Commodity Derivatives Markets Division
*****
REVIEW MEETING ON THE IMPLEMENTATION OF THE RECOMMENDATIONS OF
THE SPECIAL TEAM OF SECRETARIES (STS) ON NATIONAL SPOT EXCHANGE
UMITED (NSEL)
Summary Record of Discussion
The ninth meeting to review the action taken on the recommendations of the Special
Team of Secretaries (STS) which had been set up to examine the violation of laws and
regulations by NSEL or_any associated company or many of the participants, was held at
01.00 P.M. on 17.12.2015 in the Committee Room No. 131-A, North Block, New Delhi under
the chairmanship of Secretary(Economic Affairs). The list of participants is annexed.
2. After welcoming the participants, the Chairman requested for updated Action Taken
Report by the Departments/Agencies represented in the meeting.
3. Shri Dhananjay Kamlakar, Joint Commissioner, EOW, Mumbai Police stated that he is
representing both the Govt. of Maharashtra and the EOW, Mumbai Police in the meeting.
He informed that the Govt. of Maharashtra has appointed an Additional Collector, Mumbai
City as competent authority under MPID Act, 1999. Thus, now there would be two
competent authorities under the Act with a view to expediting the attachment and disposal
of properties. Setting up of a dedicated special Court under the provisions of MPID Act,
appointment of digital forensic auditors, services of reputed firms for valuation and auction
of attached assets etc. are at present un'der the consideration of the Govt. of Maharashtra.
In connection with the setting up of a separate court exclusively for NSEL related cases,
justification has been sought which is in the process of being submitted shortly Action
towards clubbing of cases pending in different courts and filing an SLP ir. th1<; regard in

23. Supreme Court is also under examination. Advocate General would, for defending the case
in a consolidated manner in one court, request all courts hearing NSEL related cases to
transfer such cases to the Bombay High Court.
4. Presenting updated position about the action taken by EOW, Mumbai, Shri Kamlakar
added that look out notices have been issued against 65 key officials of ml, NSEL and
accused member companies. EOW has so far file� three charge sheets including against
Shri Jignesh Shah, Ex-vice Chairman, NSEL
5. Shri Kamlakar further informed that Hon'ble High Court of Mumbai has upheld
applicability of provisions of MPID Act to the case on a writ petition filed by NSEL, which 1s
a very significant development for facilitating further investigation and progress in the
matter. The MPID court has issued notice to all accused persons/property owners whose
assets have been attached to file objections, if any, against the attachment. The next date
of the hearing is 12.01.16. He reported that properties worth Rs. 6204 crore have been
secured for attachment under MPID Act, out of which, attachment of properties worth R!>
5332 crore has been notified in the Gazette of the Govt. of Maharashtra. He also informer
that additionally, they have identified few more properties for attachment.
6. As regards progress in auctioning of attached prope-tres, in reply to a �uerv of tht'
Additional Secretary(Investment), Shri Kamlakar intimated that objections filed by accusea
persons/property owners would be heard by the MPID court on 12.01.16 and thereafter, as
per court orders, further action in the matter would be taken. He also mentioned that two
properties of Mohan India Pvt. ltd are in the pror.ess of getting auctioned as per order
dated 17.10.2015 of the MPID Court. This auction is likely to fetch approximately Rs. 300 to
400 crores. The Chairman underlined the need for the expeditious steps for auctioning
attached properties.
7. Shri Anil Ramteke, Joint Director, Entorcement DrrectoraLe ([D) stated tnat
subsequent to filing prosecution complaint under the PMLA, 2002 against NS[L and 67
other accused persons before special PMLA Court, Mumbai on 30.3.2015, ED had issued 19
provisional attachment orders in respect of assets worth Rs. 837.01 crore and all these
2

24. orders were confirmed by the Adjudicating Authority under PMLA. He mentioned that ED
had attached properties based on money trail of proceeds of crimes and such properties
can be liquidated only after its confiscation by the Trial Court.
8. On the issue of reconciliation of overlapping action with regard to the attachment ol
properties by ED and EOW Mumbai, Shri Kamlakar from EOW stated that attachment
under MPID may be preferred over attachment under PMLA keeping in view the process
and efficacy under two enactments. Shri Ramteke suggested that EOW should focus on
attaching and auctioning such properties which are not covered by action taken by ED
under PMLA. The Chairman observed that ED and EOW should work in sink on the issue
with a view to expediting the process and progress of attachment, auction and recovery of
lost money. He further advised that ED and EOW may discuss the issue of overlapping
actions with a view to arriving at a mutually agreeable solution at the earliest and apprise
this Department about the outcome immediately and in any case, before the next meeting..
9. The Chairman also emphasized that the properties without any dispute may be
considered for auction without further delay.
10. Shri P. K. Tiwari, Director, AU-India informed that Order under Section 13 of the
Prevention of Money Laundering Act, 2002 was passed on 04.11.15 imposing a penalty of
Rs. 1.66 crores on NSEL for non-compliance of various provisions of Pf'vlLA.
11. Dr. Navrang Saini, Director(Inspection & Investigation) of Ministry of Corporate
Affairs informed that for disposing off suggestions/objections of various stakeholders and in
compliance·of the order dated 7.8.2015 of the Honble Bombay High Court, an application
has been submitted before the Hon'ble High Court of Bombay for extension of time till
29.02.16 for taking considered view on the draft Order.
12. In respect of the petition filed by MCA before CLB on 25.02.15 regarding
mismanagement of affairs of NSEL by the Board of Directors of FTIL, ,t was informed that
CLB, vide its order dated 30/6/2015, granted stay on the disposal/hiving off of assets by
ml. However, ml filed an appeal before Madras Higl1 Court seeking to quash the stay
3

25. order of CLB. The Mijdras High Court, vide order dated 10.07.15, partially suspended the­
stay order. Consequently, stay on the diSposal of immoveable properties continues but for
investments there is no stay. MCA filed an application before the Hon'ble Madras High Court
seeking to set aside the stay order dated 10.07.15. However, the Madras High Court in rts
order dated 10-08-15 disposed of the application directing that the stay will continue till the
petition filed by the MCA before CLB is disposed of. MCA is in the process of filing an SLP
before the Hon'ble Supreme Court, seeking to quash the order of the Madras High Court.
13. The Chairman directed that keeping in view the importance of the issue, a senior
counsel may be engaged by MCA to defend the interests of the Government.
14. With regard to the request of FMC/SEBI to share forensic audit reports in respect of
members/brokers of NSEL (which was also reiterated by Shri Mohanty from SEBI ), Shrr
Kamlakar stated that the matter would be considered after the receipt of reports which art·
being prepared at present.
15. Shri Mohanty informed that after taking over the regulation of the Commodity
Derivatives Market, SEBI is examining the complaints against NSEL brokers who are also
members of the Commodity Derivatives Exchanges and is investigating specifically the role
1
of five brokers against which NSEL had complained for their improper act1v1ties. The
chairman observed that SEBI should examine the issue as a whole with broader perspective
and not just restrict its investigation to the complaint of NSEL. Complicity of NSEL with the
brokers should specifically be investigated.
16. Shri Madhup Tewari, DIG, CBI stated that CBI had registered two cases- one against
NSEL and PEC and another against NSEL and MMTC. Both the cases are at the final stage
of investigation. He mentioned that in respect of PEC case, charge sheet is likely to be filed
by January, 2016 whereas in MMTC case, it might be filed by Februar1, 2016. He also
mentioned that the final report in a Preliminary Enquiry conducted by the CBI about the
role of Government/FMC officials has already been submitted to the 0/0 of DEA ,n July,
2015 recommending departmental action against certain officers. While an appropnate view
4

26. has been taken with the approval of competent authority with regard to the then chairman,
FMC, the rest of the report is under examination in DEA in consultation with the CVO.
17. The meetlng ended with the vote of thanks to the chair.
*****
5