In all My MBA classes whenever issue of commodity trading in India cropped up always soybean trading in Indore was mentioned which used to make me proud but this news of a scam puts question mark over seriousness of regulators and market participants in making Indore an attractive place for investment
NBOT scam: FIR against 10
Indore, Jan 20: After Sattyam, a financial fraud of far bigger proportion has rocked the Indore, the financial capital of Madhya Pradesh and the Central India wherein the National Board of Trade (NBOT) chairman Kailash Shahra and nine other directors of the company allegedly misappropriated thousands of crores through inappropriate allotment of shares of the National Board of Trade & Commodities Exchange.
In this regard, Economic Offence Wing of the Madhya Pradesh police have registered an FIR against 10 persons including the NBOT chairman Kailash Shahra who is also chairman of the Indore-based Ruchi Soya Group, one of India's largest soya group. Other persons against whom FIR has been registered include industrialist Rajesh Neema, G L Sharda, Satyanarayan Mulchandani, Rajesh Dhammani, Jayantilal Sanghwi, Sueshchandra Mandloi, Ramesh Mishra and A K Subramanium respectively.
According to report, the National Board of Trade & Commodities Exchange, a company floated by Kailash Shahra, chairman of an Indore-based soya company had allegedly misappropriated over Rs 15,000 crores of the share holders of seven dummy companies whose directors were under his control. " Fake documents were used in the allotment of these shares by flouting rules causing huge loss to the government," the sources said.
Following a complaint of the the Madhya Pradesh Congress Committee spokesperson, K K Mishra, the State Economic Offence Wing (EOW) had started preliminary inquiry into the matter in February last year and after 11 months of probe, the EOW has finally found the soya tycoon Shahra and others `guilty' of this mega financial fraud which has outstripped the Sattyam scam.
According to sources, Shahra had floated a new company the National Board of Trade replacing the other company known as Soya Board of Trade in 1999. The objective behind constituting Soya Board of Trade was to improve the economic condition of farmers by increasing production of soybean. However, later with an amendment in its name as National Board of Trade, this organization with a total of 119 members, merely turned out to be a paper tiger, sources close to Soyabean Processors Association of India informed.
Sources alleged that a large number of shares of this organization were distributed among the fake members. Major beneficiaries of these shares were 14 private companies floated by the Ruchi Soya chief.