The Enforcement Directorate (ED) on Wednesday said it filed a chargesheet against 19 broking entities and their directors for allegedly colluding with officials of National Spot Exchange Limited (NSEL) to allure investors to trade on the NSEL platform.
The chargesheet was filed on January 28 at a special PMLA court in Mumbai under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The court took note of the chargesheet on February 3.
During the course of the investigation, properties totalling to the tune of Rs 3,288.76 crore were attached by issuing 32 provisional attachment orders. Earlier, six chargesheets were filed in the case against 94 accused.
ED’s investigation revealed that after getting registered with NSEL, they misled their clients by providing false assurances about the exchange and promoting an illegal pair of trade contracts that were not allowed.
In collusion with broking companies, NSEL established a system that bypassed the collection of warehouse receipts or physical commodities for their clients, knowing they were facilitating trades in such a manner.
The broking companies entered into a criminal conspiracy with NSEL to allure the investors to trade onto its platform on the promise of hefty returns, thereby cheating the investors through a fraudulent scheme, the ED said.
According to the probe agency, the brokerage earned through these illegal means was further utilised in business operations, resulting in the layering and integration of the proceeds of crime, and projecting them as untainted funds.
The brokerage earned by the broking companies through unlawful means to the tune of Rs 34.74 crore was also attached under the provisions of PMLA and the same was confirmed by the adjudicating authority.
The ED initiated the probe on the basis of an FIR registered under various sections of the Indian Penal Code (IPC), 1860.