After raiding the offices of National Spot Exchange Ltd (NSEL) promoters and board members on Monday, the economic offences wing (EOW) of the Mumbai police has frozen the bank accounts of the exchange and its former managing director Anjani Sinha.
Sinha's Powai residence, a few km away from NSEL's office, was searched by the EOW last night.
As the frozen bank accounts included the escrow account opened for pay-outs to investors, under instructions from the Forward Markets Commission (FMC), the exchange couldn't make any seventh weekly settlement payout to investors.
In a statement on Tuesday, NSEL said, "In accordance with legal procedures, EOW has frozen the bank accounts of NSEL, including the settlement bank accounts. Therefore, NSEL is unable to make any payouts on Tuesday. NSEL has informed the FMC of this development. NSEL is taking legal advice to de-freeze the settlement bank accounts and investors and members will be notified in due course."
Even if the exchange would have made payments, it would have been the seventh consecutive default, as during the week, only Rs 1.3 crore was recovered. After the seventh week, the shortfall, according to the settlement calendar, would stand at Rs 1,070 crore.
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