Sts of feb 2016

1. REVIEW MEETING ON THE IMPLEMENTATION OF THE RECOMMENDATIONS OF THE
SPECIAL TEAM OF SECRETARIES ON NATIONAL SPOT EXCHANGE LIMITED(NSEL)
Summary Record of Discussion
Tenth meeting to review the action taken on the recommendations of the
SpecialTeam of Secretaries (STS) which had been set up to examine the violation of laws
and regulations by NSEL or any associated company or any of the participants, was held
at 04.30 pm on 11.02.2016 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. Dr. Navrang Saini, Director(Inspection & Investigation), Ministry of Corporate
Affairs informed that Hon'ble High Court of Bombay vide the Order dated 30.10.2015
had granted time up to 15.2.2016 to take a final view on the draft order. The
Department is presently in the process of concluding consideration of all the
representations received from various stakeholders and the Ministry is about to take a
final view in the matter within the time stipulated by Hon'ble Court. Besides, in respect
of the matter before CLB, in the last hearing on 13.1.2016, pleadings could not be
concluded. The case has been posted for hearing on 24.02.2016. In addition, Madras
High Court has directed CLB to dispose of the case by 11.03.2016. The Ministry is in the
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2. process of filing an SLP before the Hon'ble Supreme Court for quashing the order in
terms of delay in filing of SLP. While expressing concern over the delay of five months,
Secretary(EA) advised that necessary action may be expedited to obviate further delay in
the matter.
4. Shri Mohanty informed that SEBI is to take action against five brokers, for which it
needs forensic audit report from EoW, Mumbai Police and other material evidence.
Additional Secretary(Investment) pointed out that nothing is known nor any status report
from SEBI has been received indicating what action is being taken by the Board in this
regard and at what stage are the investigations at present. The Chairman desired that
SEBI may inquire into the role of brokers as per the law, against those about whom
complaints in the context of NSEL payment crisis are pending for inquiry in SEBI and
Action Taken Report thereon may be sent to the Department of Economic Affairs within
a fortnight.
5. With regard to the actions to be taken by the Mumbai Police, Additional
Secretary(I) pointed out that no significant progress in the matter of finally auctioning
the notified properties has come to the notice of the Government. Shri Pravin Padwal,
Deputy Commissioner, EOW, Mumbai Police informed that four notifications have been
issued so far in the Gazette about the attachment of moveable and immovable assets
worth Rs. 5757 crores approximately of the accused and proposal has been submitted to
the Maharashtra Government for publishing notification in respect of a few more
properties attached recently, the value of which is Rs. 300 crores approximately. The
MPID Court- has issued notices to all those accused persons / property owners whose
assets have been attached to file their objections, if any, against the attachment. The
next date of the hearing is 04.03.2016
6. Shri Padwal informed further that the MPID Court has ordered for the auction of
two sets of notified properties of Mohan India Pvt. Ltd. situated at Civil Lines Delhi and
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3. Bikaner at the reserve price of Rs. 288 crores and Rs. 50 crores respectively.
Advertisement in respect of the auction of these two properties were published in the
leading national as well as local newspapers on 09.02.16. The Competent Authority has
initiated the process of auctioning and has fixed the date of inspection of properties as
24th February, 2016. The auction is slated to take place on 15.03.2016. Besides, on
17.12.2015, the MPID Court had ordered to auction five properties of accused defaulter -
M/s Swastik Overseas Corporation that will fetch Rs. 8 Crores approximately and five
properties of accused borrower - M/s NCS Sugar. AS(I) pointed out that in comparison
to the huge amount that is required to be recovered, the estimated worth of the
properties to be auctioned is not really significant.
7. The chairman desired to know whether EoW, Mumbai has engaged senior counsel
to facilitate the disposal of various cases in the matter and whether for monitoring the
progress in the matter, periodical review by the Home Secretary of the Government of
Maharashtra is being done. Shri Padwal replied that ACS(Home) reviews the progress of
NSEL related cases on regular basis. Besides, efforts are on to appoint dedicated
competent authority and the State has appointed Adv. Avinash Avhad as a Special Public
Prosecutor for effective representation in Courts in all the matters arising out of this
case. The chairman expressed concern over the inordinate delay in the matter of
returning the money to the NSEL investors and he urged that action may be taken
without further delay to auction the remaining properties also which do not have any
encumbrance/have approval of the Court and also, actively pursue with the MPID court
to obtain early orders for auctioning the remaining attached properties.
8 The Additional Secretary(Inv.) underlined the need for addressing the issue of
overlap of investigative actions between the Enforcement Directorate and the EoW,
Mumbai Police in respect of the same set of properties. He expressed hope that in the
joint meeting held recently, the two might have reached a consensus in this regard.
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4. 9. Shri Anil Ramteke, Joint Director, Enforcement Directorate (ED) stated that a
meeting to overcome the overlapping actions was held with EoW, Mumbai Police on
02.02.2016, when a list of attached assets, common to both ED and EOW, was handed
over to EOW officials. Till date, both ED as well as EoW have attached 32 common
properties valued at Rs. 740.80 crore by ED and at Rs. 1222.89 crore by EOW. In view
of the EoW having attached other properties also of relatively very high value, it was
agreed that EoW would initiate action to auction properties other than what is commonly
attached by both agencies.
10. The chairman stressed the need to form a consensus on all the issues concerning
the problem of overlapping. He as well as the Secretary(Revenue) expressed that the
counsels of both the agencies need to come forward to resolve the issue. It was
emphasized that refund of the lost investment of NSEL investors should be the first
priority of the Government. Between the said two agencies, EoW is comparatively in a
better position to realize this objective in a speedier way in view of the provisions under
the MPID Act. It was decided that the matter of overlap of jurisdiction may be
forwarded to the Ministry of Law and Justice by ED for obtaining legal opinion.
11. Shri Padwal said that all cases being investigated by EoW are not of the nature of
scheduled offences under PMLA. However, it was noted that if some cases are
registered under IPC alongwith MPID, such cases may fall in scheduled offences under
PMLA. Even on this issue, opinion of Ministry of Law and Justice may be taken by ED.
12. Smt. Deepika Mittal, Additional Director, FIU-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 PMLA.
13. • Shri Jasbir Singh, S.P, CBI informed that in respect of the two ongoing inquiries
being made by CBI, charge sheet is likely to be filed by April, 2016.
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5. 14 While concluding the meeting, below mentioned actions were decided to be taken
expeditiously by the respective agencies:
i). the Economic Offence Wing of Mumbai Police shall auction two such notified
properties of the defaulters in respect of which MPID Court has already
accorded approval;
ii Ministry of Corporate Affairs may consider taking final view on the draft order
of the merger/amalgamation of NSEL with Financial Technologies (India)
Limited, within the time stipulated by the Bombay High Court i.e., latest by
15.02.2016 and the Company Law Board may be moved to decide the case
relating to FTIL by 11.03.2016. Besides, filing an SLP in Supreme Court against
the decision of Madras High Court may also be expedited;
iii) Enforcement Directorate may seek legal opinion of the Ministry of Law and
Justice for (i) addressing the issue arising out of the overlap of its jurisdiction
with EoW, Mumbai Police in the NSEL related cases and (ii) for deciding as to
whether cases registered under IPC along with MPID may be considered as
scheduled offences under PMLA;
iv). Government of Maharashtra may take immediate action for (i) auctioning the
properties which do not have any encumbrance/have approval of the Court;
(ii) actively pursue with the MPID court to obtain early orders for auctioning of
the remaining attached properties; (iii) to appoint a Senior Advocate for this
purpose; and (iv) to have the progress of the cases reviewed by the Home
Secretary, Government of Maharashtra on fortnightly basis; and
v). Securities and Exchange Board of India may examine and take necessary
action against defaulting brokers as per law.
15. The meeting ended with the vote of thanks to the chair.
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6. ANNEXURE
LIST OF PARTICIPANTS
Ministry of Finance, Department of Economic Affairs
1.Shri Shaktikanta Das, Secretary(EA)
2. Shri Ajay Tyagi, Additional Secretary(Investment)
3. Dr. C.K.G. Nair, Adviser(CM)
4. Shri K. N. Mishra , Deputy Secretary(CD)
4. Shri Parveen Kumar, Under Secretary (CD)
Department of Revenue
Shri Hasmukh Adhia, Secretary(Revenue)
Ministry of Corporate Affairs
Dr. Navrang Saini, Director (Inspection & Investigation)
Financial Intelligence Unil-India
Smt. Deepika Mittal, Additional Director
Securities and Exchange Board of India
Shri S.K Mohanty, Executive Director
Economic Offence Wing, Mumbai Police
Shri Pravin Padwal, DCP
Enforcement Directorate
Shri Anil Ramteke, Joint Director
Central Bureau of Investigation
Shri Jasbir Singh, S.P
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Chairman