The Economic Offences Wing of the Mumbai police on Monday arrested Arun Kumar Sharma, Director of Lotus Refineries in the Rs 5,575-crore National Spot Exchange Ltd scam. It is the fifth arrest in the high-profile case, that has rocked the commodities market.

Chief of Economic Offences Wing (EOW) Rajvardhan told media persons that Sharma had borrowed about Rs 159 crore from the exchange but the money was spent on buying real estate, decorating offices and producing films. He had no intention of returning the money to NSEL, Rajvardhan said.

During the course of investigation, Sharma claimed that NSEL had fraudulently used his account for trading on the NSEL platform and added to his outstanding dues. However, EOW has found out that Sharma’s account was not compromised and he ‘was’ trading on the exchange. His arrest was necessary to iron out inconsistencies in his statement, Rajvardhan said.

EOW had earlier arrested Anjani Sinha, former Chief Executive Officer and Managing Director of NSEL, Jay Bahukhandi and Amit Mukherjee, former Assistant Vice-Presidents at NSEL and Nilesh Patel, Managing director of NK Proteins Ltd, which owes about Rs 970 crore to the exchange.

Rajvardhan said immovable assets of Sinha, Bahukhandi and Mukherjee have been frozen. Sinha’s three flats in Mumbai, could have a market value of about Rs 25 crore. The money for one of the flats was arranged by Mohan India, a large borrower of the exchange.

Meanwhile, a team of EOW officials, along with SGS, the Swiss auditor, has started taking stocks in the 20-odd warehouses of NSEL. The process is expected to be completed by Saturday.

Joseph Massey, former CEO and managing director of MCX Stock Exchange Ltd, was also questioned by the EOW on Monday, Rajvardhan said.

(This article was published on November 11, 2013)
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