You are on page 1of 10

Page 1 of 10

WHITEPAPERONTHECURRENTSETTLEMENTDEFAULTSATNSEL

1. Introduction

1.1 The National Spot Exchange Limited (NSEL) is a limited liability company promoted by Financial
Technologies (India) Limited (FTIL) in the year 2005. FTIL is a publicly listed company having around
58,000shareholders.Mr.ShahisthepromoterandManagingDirector(MD)ofFTILandholds45.63%of
itsequitysharecapital.

1.2 In the year 2006, the Government of India (GoI) invited proposals to set up national level elec
tronic exchanges for trading of commodities. Among other national commodity futures exchanges like
NCDEX,NMCE,MCXalsosubmitteditsproposal.Byanotificationdated5June2007issuedbytheMinistry
ofConsumerAffairs,GoI,NSELwasgrantedtheapprovaltosetupanelectronicexchangefortradinginone
daydurationforwardcontractsofcommoditiesandwasexemptedfromtheprovisionsoftheForwardCon
tracts(Regulation)Act,1952.Identicalexemptionwasalsograntedtotwootherspotexchanges,including
NSPOTpromotedbyNCDEXandnationalAPMCpromotedbyNCME.

1.3 InOctober2008,NSELcommencedoperationsprovidinganelectronictradingplatformtothewill
ingbuyersandsellersforspottradingofcommoditiessuchasbullion,agriculturalproduce,metalsetc.Like
NSEandBSE,NSELhasitsregisteredtradingandclearingmembers,commonlyreferredtoasbrokers,who
execute commoditytrades on the NSEL platform on behalf of and in accordance with the instructions of
theirrespectiveclientsacrossIndiawhoarecommonlyreferredtoasthetradingclients.

2. SettlementDefaultsatNSEL:Whatreallyhappened?

2.1 NSEL launchedvarious independentcontractsforbuying andsellingofcommoditieson itstrading


platformwithdifferentsettlementperiodsrangingfrom0daysto36days.Settlementperiodreferstothe
periodwithinwhichthepaymentofconsiderationbythebuyeranddeliveryofcommoditybytheselleris
requiredtobecompletedfromthetrade.Thus,forexample,inaT+2contract,thepaymentanddelivery
isrequiredtobecompletedwithin2daysfromthetransactionday(T).

2.2 Induecourse,thebrokersstartedenteringintocommoditypurchaseandresaletransactionson
behalfoftheirclientsontheNSELplatformbypairingtwoindependentcontractsforbuyingandsellingof
commodities having different settlement periods. Such pairing was done by the brokers looking at the
arbitrageopportunitybetweentwocontractstoearnarbitrageprofitmargin/fixedreturnfortheirclients;
Page 2 of 10
thiswasdonedespiterepeatedcircularsissuedbyNSELsinceFebruary2012prohibitingthemembersfrom
advertisingorsuggestinganyonethatthecontractsatNSELpromiseorofferanyfixedorassuredreturn.

2.3 To take an example of such pairing of contracts by the brokers, a buyer from Tamilnadu (acting
throughhisbroker)entersintoaT+2contractforpurchaseofaparticularquantityofpaddyfromaseller
from M.P. (who is a plant owner/ processor/ stockiest of paddy) for Rs. 100. At the same time, the said
buyer(actingthroughhisbroker)entersintoaT+25contractforresaleofthesamequantityofpaddyto
thesaidsellerfromM.P.forsayRs.110.Thus,onthe25thdayfromthedateoftransaction,thebuyerwill
gainanarbitrageofRs.10,andthepaddywillcontinuetoremainwiththeoriginalsellerfromM.P.

Onthetransactionday(T+2)orpriortothat,thesellerwilldepositthesaidquantityofpaddyinanNSEL
accredited warehouse and send an offer letter to the Exchange based on which an electronic warehouse
receiptwillbegenerated.Similarly,onthetransactionday(T+2),thebuyerwilltenderthepurchasecon
siderationtoNSEL.OnT+2ndday,i.e.,onthe2nddayfromthedateoftransaction,NSELwillpassonthe
allocationletterofwarehousereceiptandtheVATinvoicetothebuyerandthepurchaseconsiderationto
theseller.Thewarehousereceiptentitlesthebuyertotakedeliveryofthespecifiedquantityofpaddystat
edthereinfromthewarehouse.However,sincethebuyerhastoresellthesamequantityofpaddytothe
seller on T+25th day under another contract, he does not take the delivery of the paddy from the ware
house.

2.4 Inthismanner,thousandsofbuyers/resellers,actingthroughtheirbrokers,enteredintotheabove
commoditypurchaseandresaletransactionsinvariouscommodities.InJuly2013,whentheGoIdirected
NSELtostopthetradingonitsplatformandsettlealltheoutstandingcontracts,someofthelargebuyers
(plant owners/processors/stocks of commodities) failed to honor their obligation torepurchasethe com
moditiesfromthesellersonT+25thday.Thus,thebuyersexpectationofearningaprofitmarginofRs.10
wasnotfulfilled.

However,thebuyerswerestillsecuresofarasthetotalvalueofcommoditieswasconcernedastheyhad
the warehouse receipts entitling them to take delivery of the commodities worth Rs. 100 from the NSEL
accreditedwarehouseswhichwerepurchasedbythemfromthesellersinthefirstcontractofT+2.How
ever, in case of the 25 defaulting members named as accused in the charge sheet filed by the Economic
Offences Wing of the Mumbai police (EOW), when their warehouses were inspected by SGS in August
September2013,appointedbyNSEL,thecommoditieswerelargelymissing.Thusarosethepresentscenar
io of settlement defaults at NSEL by the defaulting sellers aggregating to approximately Rs. 5,500 Crores
andtheircorrespondingtradingclientsclaimingthattheyhavelostthismoney.

Page 3 of 10

3. AcaseofEmployeeFraudforwhichMr.Shahcannotbeheldresponsible

3.1 AnFIRwasregisteredon30September2013.Mr.JayBahukhandi,Mr.AmitMukherjee,Mr.Anjani
Sinha,fewotheremployeesofNSELandthedirectorsofsomeofthebigdefaultingsellerswerearrestedby
theEOWandinterrogated.Mr.ShahwasalsointerrogatedbytheEOWonmultipleoccasions.

3.2 Afterathoroughinvestigationformorethan3months,theEOWfiledthefirstchargesheeton6th
January2014.WhileMr.Shahwasnotevenarrayedasanaccusedinthesaidchargesheetasnoevidence
wasfoundagainsthim,itwascategoricallyrecordedinthechargesheetthatMr.JayBahukhandi,whowas
theAVPofWarehousingdepartmentofNSEL,hadreceivedmonetarykickbacksfromthesaid24defaulting
membersandgeneratedboguswarehousereceiptswithoutverifyingthecorrespondingcommoditystocks
inthewarehouses.Similarly,Mr.AmitMukherjee,whowastheAVPofBusinessDevelopmentofNSEL,was
alsofoundtohavereceivedmonetarykickbacksfromthesaid24defaultingmembersforintroducingthem
inthe NSEL system inviolationofthe byelawsof NSELrelatingtonetworthrequirementsandothercre
dentials.The charge sheet alsorecorded that both Mr. Jay Bahukhandi and Mr. Amit Mukherjeereported
directlytotheMD&CEOMr.AnjaniSinhawhowasfoundtobethebrainbehindtheentirefraud.These
condchargesheetfiledon4June2014againstsomeofthedefaultingmembersalsodidnotimplicateMr.
Shahinanymannerwhatsoever.

3.3 Inviewoftheabove,itisclearthatthecurrentsettlementdefaultsatNSELaggregatingtoaround
Rs. 5,600 Crores isessentially a case of employeefraud executed systemically by the abovenamed em
ployeesofNSELincollusionwiththedefaultingmemberswhichresultedinthemissingcommoditystocks.

3.4 So far as NSEL is concerned, Mr. Shah has always been a NonExecutive Director on the Board of
NSEL(Board).Thus,bydefinition,Mr.Shahwasneverinvolvedinthemanagementanddaytodayaffairs
of NSEL which were handled by its professionally qualified management team led by the MD & CEO Mr.
AnjaniSinha.BeforethecrisisbrokeoutinJuly2013,Mr.Shahhadnevermetanyofthedefaultingmem
bersorthebrokersortheinvestororanyoftheaccusedemployeesotherthantheMD&CEOMr.Anjani
Sinha.AsMr.ShahwasaNonExecutiveDirector,heneverreceivedanysalaryorotherbenefitsfromNSEL.
Mr.ShahisnotandhasneverbeenthepromotedofNSELtoanymember/broker.Hedoesnotholdevena
singleshareofNSEL.

3.5 A NonExecutive Director on the Board of NSEL such as Mr. Shah, cannot be held responsible for
thesaidfrauduntilthereisevidencewhichdemonstratesthatMr.Shahknewaboutthemissingcommod
Page 4 of 10
ity stocks in the warehouses. At the policy level, the Board of NSEL had put in place proper rules, regula
tionsandriskmanagementsystems basedonchecksand balances. Noredflagsrelatingtothemissingor
inadequate commodity stocks were ever raised to the Board of NSEL by the management team, the em
ployees,thestatutoryauditorsofNSEL(i.e.E&Yfor3yearsandMukeshPShahfor1year),thebrokersand
their auditors (who had inspected the warehouses on multiple occasions) or the investors. Further, when
thePSUssuchasMMTCandPECtradedinNSELscontracts,theComptrollerandAuditorGeneralofIndias
officeconductedtestauditsofthewarehousesandthestocksandnodiscrepancieswerefound.Addition
ally,sinceNovember2011,every15days,adetaileddatasheetfromNSELmanagementusedtogotothe
ForwardMarketsCommission(FMC)detailingthename,locationandstockpositionofeachoftheware
houses. However, no questions were ever raised by the FMC. Thus, in view of so many checks and filters
not raising any red flags ever, there was no reason/occasion for the Board of NSEL (which included Mr.
ShahasaNonExecutiveDirector)tothinkotherwiseanddoubtavailabilityofstocks.

Even when the media reports about missing stocks started surfacing in July 2013, Mr. Anjani Sinha the
thenMD&CEOofNSEL,gavespecificassurancetotheBoardaslateason30July2013thatmorethanad
equate stocks were present which should be sufficient to cover all the outstanding claims of the buy
ers/investors.HemadetheidenticalrepresentationeventotheFMCandthemediainthefirstweekofAu
gust2013.TherewasnoreasonfortheBoard(includingMr.Shah)todisbelievetheMD&CEO.Infact,An
jani Sinha himself maintains till date that even he was not aware that stocks were not there in the ware
houses. He being the only link between the Board and the day to day management, if he was not aware,
howcouldtheBoard(includingMr.Shah)beawareofthemissingstocks?

3.6 In any event, Mr. Shah fully cooperated with the ongoing investigation. He voluntarily visited the
EOWoffice14timesinadditiontothe7timeswhenhewascalledandalsoprovidedalllogisticalsupport
to the EOW for conducting the investigation. Despite that, Mr. Shah was arrested on 7 May 2014 for the
reasonsbestknowntotheEOW,Mumbai.Asoftoday,evenaftercontinuouspolicecustodialinterrogation
ofMr.Shahfor12daysfollowedbyjudicialcustodyformorethan108days,andathoroughinvestigation
for the last 10 months, the EOW has not been able to find any evidence/material whatsoever suggesting
thatMr.Shahwasawareofthemissingcommoditiesfromthewarehousesorhe/FTILreceivedanydirect
benefit from the NSEL fraud perpetrated by the 24 defaulting members in connivance with certain erst
whilesenioremployeesofNSEL.

Page 5 of 10
4. BrokersTheirroleinthecrisis
4.1 Misselling
i) ThebrokerspairedindependentcontractswithdifferentsettlementperiodslaunchedbyNSEL,
further, misselling them to the trading clients/investors promising profit assured returns de
spite repeated circulars since February 2012 prohibiting them from promising any assured re
turnonNSELscontracts.
ii) WhilenomoneytrailwhatsoeverhasbeentracedtoMr.Shah,whetherdirectlyorindirectly,it
has been found by the EOW that all the monies of the trading clients (i.e. approximately Rs.
5,400Crores)iswiththe24defaultingmemberswhoutilizedthatforvariouspurposesranging
from business expenses to real estate to luxury goods. Further, these defaulting members is
suedVATinvoicesinthenameofthebuyersonregularbasis.Thisimpliesthateitherthosein
voices were issued without actually having the goods and were thus false, or that the goods
weresubsequentlyremovedbythemfromthewarehouses.
iii) Inseveralcases,itsbeenseenthatthebrokersinthewholecycleoftransactionshadasmuch
role to play. They (brokers) are believed to have allegedly encouraged trading clients to trade
oninNSEL.AccordingtotheEOW,intheirchargesheet,saidthatthetradingclientswereas
suredrelativelyhigherreturnsbythebrokers,forhigherbrokerage.AccordingtheEOW,dur
ingtheirinvestigation,theyreckonedthatafewbrokersalsolentmoneytothetradingclients
at 10 to 12% interest, and the same was used to trade on NSEL, anticipating 15 to 16% earn
ings,inreturn.
iv) TheyaccompaniedthethenofficialsofNSELtopersuadeandinfluencehighnetworthindivid
uals to invest and trade on the platform. The police found that in certain cases the broking
houses used their clients accounts, without their (clients) information and consent for doing
trading on NSEL. The brokers altered the rules for their personal benefit. Their malpractices
have been very much under scanner for having charged percentage on investments on coun
terfeitwarehousereceipts,asperthepolicesinvestigation.

Essentially, a distinct aspect came to the EOWs notice, during their investigation, which was also men
tionedintheirchargesheetthatabigbrokingfirmassuredinvestorsaboutthesecurityoftheirinvested
money,besidestheexistenceofstocksinthewarehouses.

4.2 MarketingofproductsbyBrokers

i. According to one of the investors, inhis version to the police, said thatthebrokers also executed
bulk purchase orders without the investors permission or consent. The police added saying that
Page 6 of 10
theydidntliveuptotheirobligationofcollectingallocationletters/warehousereceiptsfortheircli
ents,which,intheirview,aggregatestoacriminalbreachoftrust.

5. RelentlesseffortsbyNSELforrecoveryofduesfromthedefaulters

5.1 FTILtookinitiativetoprovideRs179crores,withoutprejudice,bridgeloantoNSELtoensurethat
around608retailinvestorsreceivetheir100%duesand6380retailinvestorsreceivetheir50%dues.

5.2 AsonAugust28,2014,NSELhasrecoveredRs.360.74Croresfromthedefaultingmembersandthe
samehasbeendistributedamongstthereceivingmembers/tradingclientsonproportionatebasis.

5.3 Further,NSELteamismakingrelentlesseffortsforrecoveryoftheoutstandingduesofthetrading
clientsfromthedefaultingmembersincludingdeclaringthemdefaultersunderthebyelawsofNSEL,filing
civil suits for recovery of dues from them, initiating proceedings under Section 138 of the Negotiable In
struments Act, 1881 for dishonor of the postdated cheques given by them to NSEL. However, Mr. Shahs
incarcerationfor120dayshadseriouslyaffectedtherecoveryprocessfromthedefaultingmembers.

6.LegalIntervention

6.1TheEOWhasattachedassetsofthedefaultingmembersworthapproximatelyRs.4,900Crores.

6.2 The EOW arrested seven defaulters for their alleged role in cheating and criminal conspiracy case at
the Exchange. The arrested include Kailash Agarwal, director, ARK Imports; Prashant Borough, director,
Metkore Alloys; N Nageshwar Rao, director, NCS Sugars; BVH Prasad, Juggernaut Projects; Ghantaka
meshwar Rao , director, Spin Cot Textiles, and Varun Gupta and Chandramohan Singhal, both with Vim
ladeviAgrotech

6.3On22
nd
August,BombayHCgrantedbailtoMr.ShahonacashsuretyofRs5lakh.

7.NSELsinitiativestoprotectinvestorsinterests

7.1Payouts

i.On23June2014,theExchangecompletedFinancialClosureofeGoldwithtotalpaymentofRs154.77
Croreswasmadetotheunitholders.
Page 7 of 10
ii.On 27 August, 2014, NSEL declared closure of eSilver with final payouts to eligible unit holders; with
totalamountofRs141.23croresthusfar.
iii.The process of financial closure of Platinum, Copper, Lead and Nickel, which constitute the remaining
balance1.6%ofthetotalvalueisinprogressandisexpectedtobecompletedsoon.

7.2Recovery

i. NSELhasrecoveredandpaidtoinvestorsRs539.74crorestill28.08.2014,outofwhichRs.179crores
wasgivenwithoutprejudice,fromFTILsresources.Thishasclearedupto50%settlementliabilityof
around 7000 retail investors. Two members with a total liability of approx. Rs. 196 crores have
nearlypaidalltheirdues.NSELprovidedITsupportandsharedenormousdatawiththeEOWand
otherinvestigating agencies. NSELsseniorofficials havemetwithpoliceofficialsoftheEOW,CBI,
EDandUnionMinisterofAgricultureforrecovery
ii. NSELhasrefutedtheobservationsmadebytheFMCregardingtheslowpaceofrecoveryprocessfrom
the defaulters. NSEL has taken considerable recovery initiatives; the Exchange has taken Legal ac
tionsagainstthedefaulters.NSELhasfiled5ArbitrationpetitionsinBombayHighCourt,27applica
tions in MPID court and 30 complaints with the Magistrate Court with regards to bouncing of
cheques.Theboursehasalsofiled20complaintsinEOWMumbaiPolicewhichhavenotyetbeen
registered as FIR; therefore the Exchange has also filed 10 Section 156(3) applications with the
MagistrateforFIR.NSELhas also issued ThirdPartynoticesto 15Defaulters furthertothe Repre
sentativeSuitfiledbyModernIndia.
iii. ThesecoordinatedeffortshaveresultedinahistoricorderpassedbytheBombayHighCourtwherea
Committeecomprisingofthreedistinguishedpersonswasformedtooverlooktheprocessofasset
saleandrecoveryfromDefaulters.TheCommitteeconsistingofJusticeV.C.Daga(RetiredJudge
of the Bombay High Court), Mr. J Solomon (practicing solicitor) and Yogesh Thar (practicing Char
tered Accountant from Bansi Mehta &Company) would determine the amount payable by de
faulters/thirdparties,whileitisalsoempoweredtoascertaintheirassets.Themovehascomeas
abigreliefforinvestorsastheprocessofrecoverywillnowgetfasttracked.
iv. TheNSELBoardhasbeenreconstitutedandthisBoardalongwithnewSeniorManagementTeamhas
beeneffectivelyguidingandexecutingtheentirerecoveryprocess.
v. NSELhasadequatestaffstrengthandexperthumanresourcestoassistinrecovery.TheExchangehas
beenapprisingtheFMCoftherecoveryeffortsundertakenbyitthroughadetailedweeklyreport.

Page 8 of 10
8.KeyextractsfromthehighcourtordergrantingbailtoMr.Shah

8.1NoMaterialtoEstablishApplicantsAllegedConspiracy
Undoubtedly, an allegation that this has been done by the borrowers in conspiracy with the NSEL and
consequentlywiththeapplicanthasbeenmade.However,thereisnomaterialtoshowthesame.There
isnoallegationthattheapplicanthasacquiredfromtheborrowersanypartoftheillgottenmoneyearned
bythem,asaconsiderationformakingitpossibleforthemtocommitsuchfrauds,orthat,anypartofthe
money earned by the borrowers in such a dishonest manner, has been received from them by the appli
cant.Itisalmostconcededthattherehasbeennomaterialtoshowanydirectconnectionorlinkbetween
thedefaultingborrowersandtheapplicant.(Ref:Page#18;Observation#20)
8.2NoSufficientMaterialtoSupportConspiracyTheory
Thereisnomaterialtoshowanydirectlinkbetweentheamountsdishonestlyearnedbytheborrowersand
theamountsreceivedbytheapplicant.Thebenefitswhichtheapplicantissaidtohavegainedfromthese
transactionsareonlyindirectbenefitssuchasincreaseinthevolumeofbusinessandconsequentincrease
intheprofitofFTIL,andarenotsufficient,initself,tosupportatheoryofconspiracy.(Ref:Page#19;Ob
servation#21)

8.3NoLinkbetweentheProceedsofCrime&Applicant
The very fact that it would take quite some time to investigate whether the proceeds of crime, or a part
thereofhasbeenreceivedbytheapplicantfromthedefaultingborrowers,(whichundoubtedlywouldsup
porttheconspiracytheory)wouldweighinfavorofgrantingbailtotheapplicant,ratherthanweighingin
favor of detaining him in custody till this aspect would be clear. Sufficient time has already been given to
theInvestigatingAgencyandinspiteofthis,nolinkorconnectionbetweentheproceedsofcrimeandthe
applicant,hasbeenrevealedsofar.(Ref:Page#19;Observation#21)
8.4NoDirectallegations;Mr.Shaharrestedwithoutmaterialtosubstantiate
Therearealsosomeotheraspects,amentionofwhichwouldbenecessary.Thoughtherearedirectallega
tionsagainsttheapplicantintheFIRitself,theapplicantwasnotputunderanyarrest.Fiveotheraccused
werearrestedandchargesheeted.(Itisonlyataboutthattimethattheapplicantwasarrested).Threeof
them are the officials of NSEL and two, are the 'borrowers' who have made huge defaults. Thereafter,
withoutanynewmaterial,theapplicantcametobearrested.(Ref:Page#2122;Observation#23)
8.5Brokersandinvestorshadtheknowledgeofthecomplexitiesoftrading
Page 9 of 10
Thefactremainsthatthepersonswhoareraisingthegrievanceaboutsuchfictitioustradingswerethem
selvesnotgenuinetraders,andhadenteredintothetransactionspurelyasfinancialinvestments.Thereis
every reason to believe that a sizable number of socalled 'investors' whose transactions were being en
tered intothroughbrokers,actually didnotbother aboutthe fictitioustrades,andknowinglyparticipated
insuchillegalactivities,withoutraisinganyissueofillegalitythereof.(Ref:Page#14;Observation#15)
8.6Mosttraderswerenotgenuinetraders;Brokershadcognizanceaboutthefunctioningofcommer
cialmarket
Thepersons,whosemoniesarelost,includingtheFirstInformant,areapparently,notthegenuinetraders
forwhomNSELwassupposedtoprovideaplatform.Theveryfactthatthesepersonsare,asalsotheInves
tigatingAgencyis,freelyusingthetermsasthe'investors','borrowers',indicatesthat,thatthetransactions
inquestionwerenotgenuinetransactionsofsaleorpurchasewaswellknowntothesocalledbuyersalso,
whonowchoosetodescribethemselvesas'investors'.Itisclearthatfromtheirpointofview,itwasonly
an investment yielding high returns for their money. These investors are not middle class or lower class
people,butarethemselvesbusinessmen.Thetransactionsinquestionwerebeingenteredthroughbrokers
who had knowledge of the commercial market. Going by the broad probabilities of the case, it cannot be
acceptedthatthepersonswhoarenowcryingfoul,werenotawareofthefactthattheirtransactionswere
notgenuine.Theywerelookingatthesetransactionsclearlyasaninvestmentoftheirmoniesyieldingsafe
returns.(Ref:Page#:1213;Observation#15)
8.7Brokerswellawareofmarketoperationsandlegalitiesoftransactions
7. There is great substance in the contentions advanced bythe learnedcounsel forthe applicantthat the
brokers, through whom the socalled trade transactions were entered into, do have their own legal team
andafullknowledgeofhowthemarketoperates.Thelegalitiesofthetransactionswerequiteexpectedto
be known to thebrokers and the traders who do not hesitate to termthemselves as 'investors', and they
were expected to assess the legalities of the transactions. The brokers being quite experienced, and the
investors being informed persons, it is apparent that the issue of illegality of the transactions raised by
them is not out of their concern to adhere to legalities, but in order to project the applicant as the main
offender,ratherthanthedefaultingparties.(Ref:Page#:14;Observation#16)
8.8BenefitsReceivedbyNSEL,FTIL&Mr.ShahareOnlyIncidental
ThebenefitsreceivedbyNSELandFTILandconsequently,bytheapplicantfromthesefraudulenttransac
tions,areonlyincidental.Therefore,merelybecausetheapplicantisamoniedpersonandislikelytobein
positiontosatisfysomeinvestorsaswasstatedbeforethisCourtonbehalfoftheinvestorandtheinves
torshecannotbedetainedincustodyforthepurposeofforcinghimtodoso.Theexpectationisnotthat
Page 10 of 10
the money gone in his pocket should be taken out by him, but the expectation is that he having been in
strumentalinthedupingofinvestorsbytheborrowersbemadetopaytotheinvestorsashehassufficient
meanstodoso.Perhaps,theFirstInformantandtheinvestorsfeelthatbyputtingtheapplicantinadiffi
cult situation, it would be easier for them to recover their money. The culpability of the applicant cannot
successfullybeprojectedtobeofahigherdegreethanthatofthe'borrowers'(bogussellers)andtheirbro
kers,whohaveactuallytakenawaythemoney.(Ref:Page#:2122;Observation#22)
8.9Pretrialdetentioncanneverbeauthorized
Allsaidanddone,thereisnochangeinthelegalprinciplethatpretrialdetentioncanneverbeauthorized
asandbywayofinflictionofpunishment.(Ref:Page#:22;Observation#24)

9. Conclusion

9.1 TheparagraphsabovedemonstratethebonafidesandthesincerecommitmentofFTILGroupand
Mr.ShahtoresolvethecurrentpaymentandsettlementdefaultsatNSEL.Fordoingthesame,itisessen
tial that the investors and the Govt. agencies join hands with NSEL to recover the investors money from
thedefaultingsellersandbringtherealculprits(i.e.thedefaultingmemberswhoaresittingonthetrading
clientsmoney)tojustice.

9.2 Theabovealsomakesitclearthatwhiletherealculpritsarenotbeingpursued,Mr.ShahandFTIL
arebeinghangedwithouttrialby allconcerned (i.e.thetrading clients,certain sectionsof themedia,the
regulator and the investigative agencies) simply because they have: (a) deep pockets; and (b) dared to
challengethemonopolybybringingincompetitionandtransparencyinthefinancialmarketsinfrastructure
inthecountry.Theforcesworkingbehindthe scenesareclearlyaimed atdestructionof Mr.Shahshard
earnedreputationandbusinessempire.Suchwitchhuntcompelsonetowonder:arewegovernedbythe
ruleoflaworruleofmen?

You might also like