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Five years on, deadline for chargesheet missed

Tuesday, February 13, 2018
By Philip Varghese


While the investors are awaiting justice since five years, the Economic Offences Wing of Mumbai police (EOW-Mumbai) is dragging its feet in establishing the money trail of the defaulters and filing the final chargesheet that will kick-start the recovery process

Despite over five years having elasped since the National Spot Exchange Limited (NSEL) payment crisis surfaced in July 2013, the Economic Offences Wing of Mumbai police (EOW-Mumbai) is yet to file the chargesheet. This is even after the two forensic auditors appointed by the agency have been working on the case for over two years.

Sources informed that this is despite having appointed two auditors charging a hefty remuneration of Rs. 1.37 crores while the Central Bureau of Investigation (CBI) auditor, who drew a meager remuneration of Rs. 10,000 per party completed his job within three months.

“This huge fee is coming straight from the recovered dues, and the amount that could have been payed to poor and genuine investors of NSEL crisis. Also, there are instances of numerous procedural lapses that EOW-Mumbai has overlooked while appointing these auditors. Not only there have been no multiple quotes for the forensic audit work sought by the agency, but also it has appointed auditors who are not even on the empaneled list to audit entities such as equity and commodity exchanges. An empaneled list of auditors are those who are certified as having technical know-how of functioning of the exchanges. The auditors appointed by the EOW-Mumbai are not on the empaneled list,” sources said.

Investors also claimed that the another flouting of procedure by the agency has been in the form of not putting out a notification on payments to auditors. “While the agency took government approval for the payment of Rs. 30 lakhs and also duly notified the same through gazette, further payments made were not notified. The background and credentials of both the auditors are not up to the standards and do not even figure on any of exchanges accredited auditors list. Why then such auditors were appointed by the EOW-Mumbai is a big mystery?” an investor informed.

As per government approval and gazette notification of September 2015, the auditors were appointed by the EOW-Mumbai to help trace the last mile beneficiary of the Rs. 5,600 crore payment default at NSEL.

“However, after over two years of this exercise, the process is yet to be completed by the auditors and the EOW-Mumbai has also not taken any action to furnish the details sought by the auditors to this effect. The auditors had sought details of Income Tax Returns, Wealth Tax Returns along with the Balance Sheets and Bank Statemens of the directors of borrower (defaulter) companies so that the list of their personal moveable and immovable assets can be traced. The auditor firm US Gandhi & Co., had said in his submission to the Mumbai Sessions Court note that it would take 30 working days to submit the final report since the day of getting this information. However, details of these three financial years starting FY2011-12 has not been furnished yet by the agency,” an investor who wished not to be named informed.

The EOW-Mumbai has already missed several deadlines set by the court to file the chargesheet in the NSEL case and this time it has asked for another month to file the audit report and four months to file the final chargesheet. While the investors are awaiting justice since over four years, the agency is dragging its feet even in establishing the money trail to the defaulters and filing the final chargesheet that will at last, kick-start the recovery process.

Reacting to this, Deputy Commissioner of Police (Cyber Cell & EOW – Mumbai) Akbar Pathan said, “The investigation is on. However, I am not authorized to speak on this subject.” Repeated attempts by this newspaper to reach Ashutosh Dumbre – Joint Commissioner of Police (EOW – Mumbai) were futile.

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