Sts of feb 2018

1. Depart��-�-t-o"r Economic Affairs
-Financial Markets Division
CD Section
-----
ETING ON THE
MINUTES OF THE NINETEENTH REVIEW ME
OF THE STS ON
IMPLEMENTATION OF THE RECOMMENDATIONS
RMAffSHIP OF
NSEL ISSUE HELD UNDER THE CHAI
NEW DELHI
SECRETARY(EA) IN ROOM N0.131-A, NORTH BLOCK,
AT 4.30 P.M. ON 16/02/2018.
. . t shri Su bhash
After a brief self-introduction by the participan s,
b t
Chandra Garg, Chairman welcomed all the participants and se
_
t a �u
th
•·
th • t· ting agencies WIreviewing the progress made by each of e mves iga
. .
. regard to their investigations into the NSEL payment cnsis.
2. Shri Ashu tosh Dumbare, Joint Commissioner, EoW, Mumbai
Poli� made a presentation on the progress of enforcement actions �t
their end. The progress· with respect to recovery efrorts, as on date, 1s
as follows:
✓ �operties Seized: Approx Rs.
.
8167.31 Crores, total 755
Properties, 46 Brand and 28 Vehicles
J. Properties made absolute: 35
/ Properties auctioned: 6
/ Amount realised from auctione� properties; 1.73 crore
/ Amount disbursed to the in��-
st�r� : �s. 527.19 Crores
/Tot'al number of investors fully paid : 608
3. He informed that in compliance with the directions contained in
the minutes of the previous Review Meeting, they have categorized the
list of all attached properties as 5 Start 4 Star, 3 Star, 2 Star and 1
Star (depending on the level of resistance), and action to auction the
properties which have already been made absolute is being taken on
prionty and vigorous efforts are also being made, to have as many
properties as possiblt,__made absolute. The proceedings to this extent
in the MPID Court are moving in the right direction at brisk pace. Six
properties now stand disposed of and have fetched Rs. l.73 crores. Animportant order has been obtained from the MPID Court on31/01/2018 which h�.t:Lpa.ve� the way for making absolute 542 moreproperties and it is.e!.(p.ected tbat around Rs 20 crate may be received

2. 'ning· properties is under
t. the re111a1. th Efforts to auc ion
m a mon .
ed shortly.
way and would be complet
. t Bikaner and Delhi, Shri
4. As regards the attached propertl
_
es a
to their auction have
Ashutosh Du.mbare informed that all hm'.11'an
h
ces
been issued and even
d bl' tice for auction as
been cleared an a pu ic no
d t d The base price
a meeting with interested parties has been con uc e .
d R 164
for these properties has been fixed at Rs.26.40 c:ores
:; f
s.
crores respectively. These properties will also be dispo
_
se O soon.
5. He has, further, informed that 85 additional bank accounts of
the beneficiaries have been frozen and a proposal to attach these
accounts as well as 5.15 crore shares has been sent to the competent
authority. It was suggested that disposal of shares and such liquid
assets can fetch around 2000 crore in a short period of time.
Chairman suggested that EoW should expeditiously get the seized
liquid assets made absolute as these would not involve any
auctioning process.
6. The Chairman remarked that so far only 608 investors
whose claims were less than Rs.2 lac have been fully paid back.
EoW should expedite the auctionin& process and arrange to pay
back on priority all those 6445 investors whose claims fall
between 2 lac and 10 lac as these investors constitute a major
chunk of the total number of investors·, Sbri Ash¼tosh Dumbare
stated that an amount of Rs.163 crores would be required in order to
pay off all the p�nding claims falling in the category of 2-10 lac, and
expressed confidence that this would be achieved within next
couple of months.
7. As regards arresting the two accused viz. Shri Daljeet Singh and. .Shri Jaspal Singh of Sirsa, Haryana (M/s.Namdhari Group) who are
still at large, Shri Ashutosh Oum.bare informed that EoW team could
not be sent to Sirsa after December '17 as the team has been busy
with verification of the title of the properties, -which are spread across
17 States. Now more th�f the title verification work is -over.
The team will be sent to Sina �r�gularly in search of these
accused. The Chairman has remarked that EoW should take the
matter to the notice of their. -DGP .:a.iid see to it that a letter is
issued from DGP, Ma��tra �o DGP, Haryana for immediate
. . . �·;, ..
' :

3. 1
d·t t:n�.u
.. , arrest of the accused. Simultaneously EoW should expe
t
e
l ·ined
{forts to get th
·· '
d proc ate ese accused persons ·declare a
s t to
offender� through the court. He also requested. IT Depart
Jll
e
n
s
offer their help in investigation.
8· Furiliennore; Shri Ashutosh Dumbare, JC, EoW raised the issue
of overlapping jurisdiction vis-a-vis the Enforcement Directorate and
informed that out of the properties attached by EoW, overlapping of
attachment orders by ED under PML Act has occurred in the case of
67 properties. Shri Ashutosh Dumbare stated that things are going
very smoothly in the Special MPID court and it will be· easier and
quicker to settle the claims of the investors through MPID court than
through PMLA even though powers under PMLA are wider. Sh
_
ri
Sanjay Lawania, JD, ED informed that a proposal to amend Section 8
of the PML Act in order to allow, inter alia, the Special Court to
consider the claims of the claimant for the purpose of restoration of
seized properties even during trial is currently under consideration of
the ED. Concurring in the opinion of the EoW, the Chairman
remarked that the ultimate objective of the Government is to
ensure that all the investors in this case are paid back the·
money, and asked the Enforcement Directorate to explore the
feasibility of giving precedence to the claim of EoW Mumbai ..
Police, on these 67 commonly attached properties for further
necessary action.
9. At this point of deliberations, Shri Amit Pradhan, CGM, SEBI
mentioned that there·is �eady an established ruling of the ·Supreme
Court in a PACL collective investment scheme matter wherein the
Hon'ble Court has ,, lj�ta that recovery of the investment lost by
investors and its repayipent shall outweigh all other concerns of the·
.., Government in t!1,es-ds of cases. The Chairman opined that. the
same should hold good in the case of the crime proceeds· of Rs.54 .
: crores seized by"'tlie Income Tax Department from the defaulter·
accused fiij_n. -yiz.M./s.Mohan ·India Pvt. Ltd. At this point, Shri
1
S.K.Singh,. e'IT (Investigation), CBDT informed that the Special MPID
«:-. , ½:'. �
court . has already ordered recovery of Rs.54 crores from IT
Deparbftent. ··However, the IT Department has filed an appeal �
Bombay High Court against th& MPID court's order and t�e CaAe'"lS
scheduled to be heard on O1/03/ 18. Around Rs 470 Crore-is due to
h Ch . n advised the. ,
the IT Department. In vie� of the above, t e airma
:. .

4. h strength of the
�"- on t e
1 to p.i;:,� eeJdng return
uest/proposa
d to above, s
to the
EoW to send their req
t's ruling referre
d IT Departlllent
Hon'ble supreme cour
d by the ED an
..n Account to the
d seiZe L E5cro- - g· h
of the crime procee s
ount or NSE
stors through ig
Competent authority's ace
ded genuine inve
.1,-gty share the
wring the defrau accoruµ..
extent of repa,,--
·tt e SEBI JJlaY
d IT DepartJJlent
int d Comm1 e · VI ED an
Court appo e
rt ruling with Eo .
i authorities for
details of the apex cou
Uy with tbe r
may take up the matter interna
facilitating this coordinated action.
. 0 informed that as part of
10 Shri "Sanjay Raj, Addi. Director, SF!
. from the affected
·
h alled for c1rurns
d·
their investigation, the� _ave. c
. . the newspapers and sen ing
investors by way of pubhshing mvites m
So far around
t t the known addresses.
emails and letters by pos o
d . vestors) accounting
7000 investors (out of the stated 13000 du
�;O �his raises concerns
for around 2000 cror� have been traced by_S ·. . . . progress.
on the genuineness of claimants and the mvestigation is m
t
. har
e
The Chairman requested EoW and High Court Committee O s
t
with SFIO numbers/list of affected investors, alongwith amoun -
wise break-up. It was suggested that repayments /disgorge ents
shall_ be done only to genuine clients through a
monitored mechanism.
11. There was also a discussion on the changes being m
unique client codes (UCC) by these brokers which raise
about the genuineness of the u:ivestors. Generally, 15 minu
given at the end of the trading session to correct the pun
However, they have observed that client code changes w
carried out even at 2 AM in the morning. SFIO suggested
their forensic audit is completed it would be easy t
liability on brokers / NSEL for these undue UCC c,--�,
assured to expedite the same.
12. Shri Amit Pradhan, CGM, SEBI informed that th
appointed auditors to conduct audit of the accounts of
commodity derivative brokers whose names figured in the
Report forwarded by the EoW. On the basis of the Aud.it
enquiry proceedings have been initiated against the 5 brok
currently the proceedings are at the stage of personal hearing
the competent authority. The Chairman enquired to know w.

5. .,....' .
',; 11a.s
_
n�t initiated action against other brokers and that DEA has been
rece1v1ng a lot of complaints against SEBI for this reason. Shri Ami
t
Pradhan, CGM explained that with regard to the other tainted broker
s
,
no re�ere�ce/adverse remarks have been received from any of the
Investi�ative/Enforcement agencies, including clean chit given_ to tbem
if any._ S�BI has initiated action against all the five brokers, without
exception, whose names appeared in the Interim Report of EoW. If the
nrunes of any other brokers happen to figure in the Final
Report/Charge Sheet which is yet to be submitted by the EoW and if
referred to SEBI, then SEBI will definitely initiate action against them
also.· He has further assured the Chairman that the proceedings
currently going on against the five brokers will be speeded up.
c'hairman advised other "agencies to share information with SEBI
on other defawting:'"16;-:;r:::;:o�k-:::e::::r
==
s
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t3. The· meeting ·ended with a vote of thanks to the Chair. The list of
>articipant� i� attached.