Mumbai, Feb 5 The Directorate of Enforcement (ED) on Wednesday said it has filed a Prosecution Complaint (PC) against 19 broking entities and their directors for allegedly colluding with officials of the National Spot Exchange Limited (NSEL) in a money laundering case.
The complaint was submitted on January 28 before the Special Court (PMLA) in Mumbai under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The court took cognizance of the matter on February 3.
The investigation was initiated based on an FIR registered under various sections of the Indian Penal Code, 1860, ED said.
According to ED, its probe revealed that these broking firms, after registering with NSEL, misled their clients by making false assurances about the exchange and promoting illegal "pair trade" contracts, which were not permitted.
In collusion with these brokers, NSEL allegedly created a system that bypassed the requirement for warehouse receipts or physical commodities, knowingly facilitating unlawful trades. The brokers, in a criminal conspiracy with NSEL, lured investors onto the platform with promises of hefty returns, ultimately defrauding them, the financial probe agency said.
The illicit brokerage earnings were further funneled into business operations, leading to the layering and integration of proceeds of crime (PoC) to make them appear as legitimate funds.
The ED has already attached illicit brokerage earnings amounting to Rs 34.74 crore under PMLA, 2002. This attachment has been confirmed by the Ld. Adjudicating Authority, PMLA, New Delhi.
During the course of the investigation, properties worth Rs 3,288.76 crore have been attached through 32 Provisional Attachment Orders, ED said.
Earlier, six Prosecution Complaints had been filed in the case against 94 accused individuals.
Further investigation is underway, ED said.
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