Defaulting Brokers of NSEL laundered the ill-gotten wealth they made by duping NSEL investors of Rs 5,600 crore by buying private property.
How the money was made?
ED investigations have revealed that 15 defaulting members had obtained huge funds from NSEL by trading against fictitious stocks of commodities like sugar, rice, TMT bars, chrome, castor oil, cotton and wool. Fake receipts of the goods/commodities were generated. Such non-existent goods were then sold on the exchange and the funds derived from such fraudulent sales were siphoned off.
The defaulting members admitted in their statements before the ED to having launched contracts on the NSEL portal without having stocks of their respective commodities and collected huge funds.
During their investigation, ED officials noticed certain irregularities in transactions between Indian Bullions Marker Association (IBMA), a step down subsidiary of FTIL, and the defaulters of NSEL. The agency believes that dubious entries were made to siphon off money from the NSEL platform.