A Mumbai court has recently directed the Economic Offences Wing (EOW) of Mumbai Police to examine the actions of Ramesh Abhishek, chairman of the Forward Markets Commission (FMC), in relation to the payment default crisis at the National Spot Exchange Limited (NSEL).
The Maharashtra Protection of Interest of Depositors (MPID) Act’s special court granted NSEL’s request for additional investigation into the FMC chairman’s involvement on May 12, 2023.
After reviewing the material, a special Judge Sayyad noted that Ramesh, who was the FMC Chairman at the relevant time, had engaged in some questionable behavior and omissions. The judge suggested that any suspicious behavior and omissions highlighted by NSEL needed further investigation.
This investigation would not harm the prosecution and might even reveal the truth about the criminal liability of the culprits. The court clarified its position, stating that it was not forming an unfavorable opinion about Ramesh, but simply authorizing an application for investigation.
The court further directed the investigation officer to conduct an impartial investigation without being influenced by any court observations. Additionally, the officer must submit a report on the investigation against Ramesh within 40 days.
The case originated in 2014 when an investor claimed he was defrauded of a large sum of money. The investor had invested huge amount with a broker who falsely claimed that NSEL was completely safe and could provide returns of 15-18% per year. However, after the default on the NSEL platform in June 2013, the investor filed a complaint and an FIR was filed under the MPID Act.
For a span of nine years, an extensive probe was conducted by the economic offences wing (EOW), leading to the submission of eleven chargesheets. NSEL’s plea indicated that Ramesh served as a full-time chairman of FMC from September 2012 until September 2015, and during the period of 2010-2015, he was a participant in all determinations made by FMC regarding NSEL. NSEL also asserted that while under Ramesh’s chairmanship, FMC exceeded its authorized jurisdiction that was confined to Foreign Contribution (Regulation) Act (FCRA), and presented an unethical proposal to the Ministry of Corporate Affairs to merge NSEL with its parent company, Financial Technologies Group, now recognized as 63 Moons Technology.
According to NSEL, the proposal sent by FMC had malicious intentions and aimed to cause harm to NSEL, its parent company, as well as brokers and defaulters. The union ministry of corporate affairs approved the amalgamation based on the malafide proposal from FMC. Nevertheless, in 2019, the Apex Court quashed this decision.
