63 moons technologies : MPID Court makes directors & promoters of India Infoline Commodities, Anand Rathi Commodities and Geojit Comtrade as accused in NSEL case

Press Release

MPID Court makes directors & promoters of India Infoline Commodities, Anand Rathi Commodities and Geojit Comtrade as accused in NSEL case

Mr. Nirmal Jain of IIFL Group, Ms. Preeti Gupta of Anand Rathi Group & Ms. Shiney George of Geojit Group along with others to face trial as accused

Mumbai, May 19, 2023: The Special MPID Court on Thursday made Mr. Nirmal Jain, the director of India Infoline Commodities Ltd (IICL), Ms. Preeti Gupta, the director of Anand Rathi Commodities Ltd (ARCL), and Ms. Shiney George, director of Geojit Comtrade Ltd (GCL) as accused in the National Spot Exchange Limited (NSEL) payment default crisis.

Apart from the above, Mr. Roop Kishor Bhootra - the director of ARCL, Anand Rathi Financial Services Ltd. - the Promoter of ARCL, IIFL Finance Ltd. (earlier known as IIFL) - the promoter of IICL, and Mr. Manish Gupta - the director of Geojit Comtrade Ltd, have also been made accused in the NSEL case by the Hon'ble Court.

Earlier in 2018, the Economic Offences Wing (EOW), Mumbai had in its chargesheet against the 3 broking entities & 3 directors made them accused and had also declared the entities as Financial Establishment under MPID Act.

In an application, NSEL had prayed to the Hon'ble Special MPID Court to take cognizance and issue process against the directors and promoters of the said three commodities broking entities in view of the statutory mandate of Section 3 of the MPID Act. A separate application was also filed by an individual trader seeking similar reliefs whose broker was India Infoline Commodities Ltd.

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The Hon'ble Special MPID Court after perusing the evidence adduced before it recorded the following in its order: -

"If the documents referred as above, taken into consideration in its entirety, it would prima facia indicate that main promoter and director of broker companies are kept out of chargesheet by concern IO, despite the statutory mandate of Section 3 of MPID Act without providing cogent reasons while similarly placed persons have been arrayed as an accused"

"The statements of witnesses referred as above, would primafacia indicate that brokers had misrepresented investors about high returns and induced them to trade on NSEL platform. This court while examining the documents on record noticed in chargesheet dated 27.12.2018 various brochures issued by 3 brokers to their investors inducing investors to trade, promising fixed returns etc"

The Hon'ble MPID Court after recording its reasons and having prima facie satisfied itself with the evidence took cognizance of the offences punishable under Sections 409, 465, 467, 468, 471, 474, 477A, 120B of IPC and r/w Section 3 of MPID Act 1999 and 21(a), 21(b), 21(c) and 21(g) of the FCR Act, 1952 and ordered issuing process for the aforesaid offences against the following companies (promoters) and directors:

Accused Promoter Companies of Financial Establishment

1. IIFL Finance Ltd. (earlier known as IIFL)
2. Anand Rathi Financial Services Ltd

Accused Directors of the Financial Establishment

1. Mr. Nirmal Jain
2. Ms. Preeti Gupta
3. Mr. Roop Kishor Bhootra
4. Ms. Shiney George
5. Mr. Manish Gupta

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The above persons / entities will now be on the same footing as that of other accused in MPID Case No. 1 of 2014 and will have to face the trial as and when it begins. The tally of total the accused so far in NSEL case is 220 in 11 chargesheets that has been filed by the EOW.

The brokers are now facing the heat in NSEL case. In another case before the Special MPID Court, the State of Maharashtra has filed an affidavit stating that IICL collected deposits from 1653 traders amounting to Rs.

326.22 crores in addition to having earned handsome brokerage and other fees / charges. In the same affidavit, the State of Maharashtra made an affirmative statement that the properties of IICL, its promoters and directors need to be secured for the interest of depositors.

Last year, the SEBI too had declared India Infoline Commodities Ltd, Anand Rathi Commodities Ltd, Motilal Oswal Commodities Ltd, Geojit Comtrade Ltd. and Philip Commodities Ltd as Not Fit and Proper persons and cancelled their application for registration as intermediaries.

For further information, contact,

National Spot Exchange Limited [e-mail] Tel.: [phone]

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• MA 339/23 a/w Exh.619 in MPID Spl C.1/14

IN THE COURT OF SPECIAL JUDGE FOR MPID

AT BOMBAY

COMMON ORDER IN

MISC. APPLICATION NO. 339 OF 2023

(CNR NO.MHCC02­002789­2023)

IN

MPID SPECIAL CASE NO.1 of 2014

AND

EXH. 619

IN

MPID SPECIAL CASE NO.1 of 2014

(CNR NO.MHCC02­000875­2014)

Misc Application No.339 of 2023 :
In the matter between:
Arvind Kumar Bahl
Age 76
RIO A - 105, Sushant Lok­1,
Gurugram, Haryana - 122002.	…	Applicant
Versus
The State of Maharashtra
Through Chief Investigation Officer,
Economic Offences Wing, NSEL - SIT,
3rd Floor, New Police Commissioner
Office Building, Near Crawford Market,
Mumbai - 400 001.	…	Respondent
Exh.619 in MPID Case 1/2014 :
In the matter between:
National Spot Exchange Limited	…	Applicant
Versus

2	MA 339/23 a/w Exh.619 in MPID Spl C.1/14
State of Maharashtra
Through Chief Investigating Officer,
SIT (NSEL), Economic Offences Wing,
Unit­ V, CB­CID, Mumbai.	…	Respondent

Appearances:

Ld. Adv. Shri. Rahul Arote for applicant in MA No. 339/2023.

Ld. Adv. Shri. Arvind Lakhawat, Adv. Nimeet Sharma and Adv. Ms. Jalpa Shah i/b MZM Legal LLP for applicant in Exh.619.

Ld. S.P.P. Shri. Sunil Gonsalves for the State/EOW.

Ld. Adv. Shri. Mihir Gheewala alongwith Adv. Shri. Santosh Pawar for accused no.65.

CORAM : HIS HONOUR SPECIAL JUDGE

SHRI A.S. SAYYAD

SPECIAL COURT (C.R.No.52)

DATE : MAY 18, 2023.

(DICTATED AND PRONOUNCED IN OPEN COURT)

:ORAL ORDER:

By this common order the above numbered proceedings are disposed of together as it involves common and overlapping questions.

Factual matrix:

2. The applicant in M.A. No.339/2023 is an investor who had invested huge amount Rs.22,24,604 through his broker namely, India Infoline Commodities Limited (IICL) which was acting as Trading Cum Clearing Member of National Spot Exchange Limited (NSEL). He was having unique client code (UCC) (IIFL ID PAMAABHL). According to him, during the period of 2012­2013 he had invested the above amount with the above broker. Initially, smart assurance and promises had given by said broker to return the handsome amount on the investment above. However, his broker exactly acted contrary against his interest. It so happened that broker of the applicant caused him huge loss due to