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Nsel scam: more bollywood links emerge

Vivek (CA )     30 October 2013

 186 likes  2312 points

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MUMBAI:Two of the two dozen defaulting members on crisis-hit spot exchange NSEL have links with tinsel town. After Lotus Refineries' CMD Arun Kumar Sharma, who jointly produced Satya 2 through a group company, LR Media, it turns out that the managing director of PD Agro Processors has financed upcoming film Gang of Ghosts, a remake of Bengali comedy Bhooter Bhabisyat. Surender Gupta, MD of PD Agro, which owes over Rs 600 crore to investors, is a director of White Rice Entertainment, registered in March 2013. Both Gupta and Sharma have been interrogated by the Mumbai police which has filed an FIR in the case on September 30. Lotus' MD appeared before the Economic Offences Wing (EOW) of Mumbai police on Monday while Gupta appeared on Tuesday. The two are being quizzed about their role in the NSEL scam and their film business, said Balsing Rajput, deputy commissioner of police, EOW. Rajput added that directors of other borrowers on NSEL including NCS Sugars and White Water Foods have also sent themselves before the police over the past two days. "We have recorded the statements of Sharma and Gupta and are questioning directors of other companies who have begun appearing before us," said Rajput. "No borrowers had been arrested till 19:30 hours on Tuesday. But, we can arrest them if they don't cooperate in the investigation. Directors like Gupta have been asked to produce more documents. What we are ascertaining is their role in the NSEL fraud, the money trail, etc." He added that the NSEL case had now been transferred to the Maharashtra Protection of Investors Deposits (MPID) Court and extension of police remand was being sought from there. The police are also examining the role of NSEL auditor SV Ghatalia, an E&Y affiliate, after complaints by investors. The police have named auditor Mukesh P Shah, which audited NSEL's books in FY13. The EOW has arrested four people behind the fiasco. These are Anjani Sinha, the bourse's former MD & CEO, two associate vice presidents, currently in judicial custody, and the managing director of NK Proteins Nilesh Patel, whose police custody has been extended till October 31. NSEL suspended trading on July 31 following a government diktat earlier that month for violation of spot exchange norms. Instead of conducting deliveries of commodities on its platform through one-day forward contracts the exchange allegedly ran financing activity in the garb of contracts. These contracts allowed two dozen borrowers with dubious backgrounds to raise crores from investors by selling them farm and non-farm commodities and simultaneously agreeing to purchase them back at higher rates through paired contracts after 25-36 days. It was later found that commodities were non-existent.

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