EOW to seek red corner notice against former NSEL director

Mumbai

: The city economic offences wing (EOW), probing the Rs 5,600-crore National Spot Exchange Ltd (NSEL) cheating case, has compiled all the documents for a red corner notice (RCN) against the exchange’s former director, Hariharan Vaidyalingam.


All documents related to Vaidyalingam’s RCN will be forwarded to the CBI, which will sent them to the Interpol, which will finally issue the notice to all countries. An RCN is issued against an accused who is not in India which helps other countries to locate him and deport/extradite him.

A look-out circular (LOC) against Vaidyalingam has already been issued to all airports in India. So, if he arrives from abroad, he will be detained at the airport itself. “Vaidyalingam is currently believed to be in Singapore. He was given the responsibility to run an exchange over there,” said an officer.

In June 2018, the first RCN in this case was issued against Anubhav Agarwal of the Ludhiana-based Ark Imports. Agarwal is believed to be in Russia. With Rs 719 crore of payment default, ARK Imports is the second largest defaulter in the NSEL cheating case.

On August 29, 2018, Sebi had barred Vaidyalingam from the securities market for seven years in the case of insider trading in the shares of Multi Commodity Exchange. Besides, the watchdog had also directed that a copy of the ruling be forwarded to the Monetary Authority of Singapore and the US Securities and Exchange Commission since he was working in Singapore.

The EOW had asked the Serious Fraud Investigation Office (SFIO) to verify the authenticity of over 13,000 investors in the case. The SFIO had sent letters to all investors and reported that it had received replies from 7,217 investors. “This does not mean the remaining investors do not exist. We need to find out more about them now and verify everything...” said an officer.

The EOW is also likely to summon former NSEL vicechairman and director Jignesh Shah, who was earlier arrested. He is out on bail. “We have got some fresh evidences during the forensic audit and may summon him soon,” said the officer. EOW has also issued LOCs against 96 persons, including 41 brokers, to nab if they try to leave the country. The police have also begun issuing notices to 147 brokers asking them to inform the investigators about the brokerage they earned while trading on NSEL.