Moneycontrol
Sep 12, 2013 10:59 PM IST | Source: CNBC-TV18

ED alleges fraud against NSEL under FEMA, PMLA

In its report, the ED has suggested financial irregularities in the form of Foreign Exchange Management Act (FEMA) violations and more violations under Preventive Money Laundering Act (PMLA), indicating that siphoning of money took place.


The Enforcement Directorate (ED) today submitted its report to the Finance Ministry on the NSEL crisis, reports CNBC-TV18’s Aastha Maheshwari. The ED incorporated inputs from various other agencies like the Income Tax Department, Sebi, FMC and the Reserve Bank (RBI).


Also read: FMC examines 'fit & proper' status of NSEL promoters


In its report, the ED has suggested financial irregularities in the form of Foreign Exchange Management Act (FEMA) violations and more violations under Preventive Money Laundering Act (PMLA), indicating siphoning of money took place.


The ED has submitted this report after consulting all related ministries. The Economic Offence Wings (EOW) is likely to finalise its preliminary investigation report which his expected to be completed this weekend. In this report, EOW has observed that NSEL has misrepresented facts to its investors which confirms that they have cheated them.

Inline with the tax dept’s findings, the EOW has also said that bogus warehouse receipts have indicated that cheating and fraud had been done. Additionally, the EOW has said that it can register a case of fraud against the company while the FMC can also get a stronger case to revoke the fit and proper clause for NSEL promoters.

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