Enforcement Directorate sleuths on Wednesday grilled Anjani Sinha, former managing director and chief executive officer of National Spot Exchange (NSEL), which is facing Rs 5,600 crore payment crisis, in connection with a money laundering case related to the exchange.
The ED had, on Monday, registered a preliminary inquiry report under the Prevention of Money Laundering Act, suspecting large-scale money laundering in the crippled exchange.
Sinha was supposed to appear before the Mumbai Police’s Economic Offences Wing (EOW) on Wednesday but his wife Shalini Sinha, Managing Director of SNP Designs, approached the police officials with an application in which Sinha stated he would show up before them on Thursday.
The Indian Bullion Market Association (IBMA), which is 60 per cent owned by NSEL, had earlier entered into an agreement with SNP Designs. In spite of losses, trading on behalf of SNP was allowed to continue and no margin money was ever taken from SNP, according to investigation sources.
IBMA is due to receive several crores of rupees on account of losses arising from trades executed on behalf of SNP, sources added.
Sinha, who had filed an affidavit before a city court a few days ago, had blamed the entire former senior management of NSEL, including himself, for the trouble and the scam.
Sinha claimed he had suspected that some of the former senior executives had entered into dealings with buying members of NSEL for personal benefit and demanded a judicial inquiry against them.
He admitted submitting “wrong stock statement” to the NSEL board and commodity regulator FMC based on the report by the warehousing division of the exchange.
Taking the blame for not informing the board about increasing exposure and risk of widespread defaults, Sinha stated the management allowed the exchange to function and did not stop trading due to fear of defaults.
Citing several instances of misrepresentation of stock position and fund diversion, Sinha said buyers diverted funds availed through fictitious sale transactions to purchase real estate and other properties.
Two former executives of NSEL were arrested last week in connection with the scam.