NSEL payment default case: Mumbai court orders probe against Forward Markets Commission Chairman Ramesh Abhishek

A Mumbai court recently directed the Economic Offences Wing (EOW) of the Mumbai Police to investigate the role of Ramesh Abhishek, Chairman of Forward Markets Commission (FMC), in the National Spot Exchange Limited (NSEL) payment default crisis.

The special court under the Maharashtra Protection of Interest of Depositors (MPID) Act on May 12 allowed an application filed by NSEL seeking further investigation into the FMC chairman’s role. 

After examining the material, special judge AS Sayyad observed that there were some suspicious acts and omissions on Ramesh’s part as FMC Chairman at the relevant time. 

“Whatever the suspicious acts and omissions highlighted by the NSEL requires to be investigated by way of further investigation. No prejudice or harm will cause to prosecution if the matter is investigated into the above facts. On the contrary, actual truth will come out which will helpful to decide criminal liability of the actual culprits” the judge opined.

The court also clarified that it was not forming any adverse opinion against Ramesh, but only allowing the present application for investigation. 

It directed the investigation officer to not be influenced by any observations of the court while conducting an impartial investigation. The officer was also directed to submit a report on the investigation against Ramesh preferably within 40 days.

The case has its genesis in 2014, when an investor filed a complaint claiming that he was cheated of a huge amount. In 2012-13, he invested a huge amount with a broker who misrepresented that NSEL is extremely safe, risk-free and could fetch 15-18% guaranteed returns per annum.

After the default on the NSEL platform in June 2013, the investor filed a complaint and an FIR was registered under the MPID Act. 

Over the course of a detailed investigation lasting nine years, the Economic Offences Wing (EOW) filed eleven chargesheets. 

NSEL’s application pointed out that Ramesh was appointed full-time Chairman of the FMC in September 2012 and continued to hold the said position till September 2015. From 2010 to 2015, he was actively involved in all decisions taken by FMC relating to NSEL. 

NSEL also claimed that under Ramesh’s Chairmanship, FMC exceeded its jurisdiction which was limited to Foreign Contribution (Regulation) Act (FCRA) and sent malafide proposal to the Ministry of Corporate Affairs to forcibly merge NSEL with its parent company, Financial Technologies Group, now known as 63 moons Technology. 

This proposal, NSEL claimed, was sent by FMC with malafide intention to wrongly cause loss to NSEL, its parent company as well as brokers and defaulters. 

Based on the FMC's malafide proposal, the Union Ministry of Corporate Affairs allowed amalgamation. However, this decision was ultimately quashed by the Supreme Court in 2019.

Advocates Arvind Lakhawat, Nimeet Sharma and Jalpa Shah briefed by MZM Legal LLP appeared for NSEL. 

Special public prosecutor Sunil Gonsalves appeared for EOW. 

[Read order]