NSEL Scam: Supreme Court Raps 63 Moons Technologies, Sets Deadline To Settle With Investors

The Supreme Court issued a final warning to 63 Moons Technologies Ltd. on Monday to settle with the 13,000 investors that were duped in a Rs 5,600-crore scam in 2013.

The top court has granted the company four weeks to make progress toward the settlement it has promised, but it has made it clear that the company is prima facie in contempt of the court's orders.

The court added that it will be forced to take a strict view of the matter on the next date of hearing, if nothing positive comes out during the four weeks granted.

63 Moons informed the court that it has settled with around 7,500 investors out of the 13,000 in question, and was in talks to settle with the remaining as well.

"We will pay all the investors," the company said.

During the last hearing, the NSEL Investors Action Group informed the court that the company had transferred Rs 1,700 crore out of the assets that were attached for the recovery of investor dues totalling Rs 5,600 crore.

In 2022, the top court upheld the Maharashtra government's decision to attach properties of 63 Moons in connection with a Rs 5,600-crore scam that duped nearly 13,000 investors back in 2013.

63 Moons, formerly known as Financial Technologies India Ltd., was founded and funded by Jignesh Shah back in 1988. 63 Moons was the parent company of the now defunct National Spot Exchange Ltd., which suspended trading activities in 2013 following the multi-crore scam.

The scam prompted the Maharashtra government to attach properties belonging to NSEL's parent company, 63 Moons, as it held a 99.99% stake in it. The step was taken to recover the lost investor money.

However, the Bombay High Court in 2019 set aside the state government's order of attachment as it held that NSEL did not retain the commodities or the money. NSEL only performed the role of a facilitator, in a manner similar to the BSE, the high court had said.

The top court was not moved by the high court's line of reasoning and, therefore, set aside its order that vacated the attachment of properties by the state government. The apex court said that NSEL represented that on receiving money and commodities, the members would receive "assured returns" and a "service".

Though NSEL has been receiving deposits, it has failed to provide services as promised against the deposits and has failed to return the deposits on demand, the top court said while upholding the state government's order of attachment.