The Forward Markets Commission (FMC) has found money laundering and warehouse fraud at the debt-ridden National Spot Exchange Limited (NSEL), reports CNBC-TV18's Varinder Bansal. In its report to the Enforcement Directorate (ED), the FMC has said that NSEL's fit & proper status is under risk.
The finance ministry founded two sub-committees to look into the crisis. One of the committees under Enforcement Directorate (ED) has started collected inputs from various agencies like the Reserve Bank of India (RBI), Directorate of Revenue Intelligence (DRI), Securities and Exchange Board of India (Sebi), FMC, Central Board of Direct Taxes (CBDT), and Serious Fraud Investigation Office (SFIO).
While the RBI is examining whether NSEL can be considered as an NBFC or not, Sebi is examining whether the NSEL's scheme can be considered a ponzi scheme. FMC sources also tell CNBC-TV18 that they want ED to undertake criminal investigations on NSEL & its directors. This may lead to fit & proper status of the NSEL promoters coming under risk.
In another interesting finding where Grant Thornton, who has undertaking forensic audit in NSEL has submitted its preliminary finding. The preliminary reports indicate that the borrowers were defaulting since last two years and NSEL was carrying its normal business even post the borrower defaulting.