Police attach brand owned by NSEL borrower; say more such action likely


February 8, 2014

Sharleen D’Souza, Business Standard

Mumbai, February 8, 2014

The economic offences wing of the city police on Friday attached a brand belonging to P D Agro, in the National Spot Exchange (NSEL) payment default case. P D Agro owes Rs 637 crore.

It is the first occasion in which the EOW has taken such an action. It was done under the Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act.

PD Agro, the third largest borrower from NSEL in the Rs 5,600-crore payments scam, owns Dunar Foods, a brand of rice which has a good name in northern India, West Asia and Europe. The brand is valued at a minimum of Rs 1,000 crore, say EOW officials.

They said they’d attach more brands, of other NSEL borrowers who are yet to repy. They declined to divulge details.

Experts say the immediate impact will be on the trade and distribution network of the brand. “The impact depends on the customer experience and government action,” said Devangshu Dutta, head of Third Eyesight, a retail and consumer consultancy.

So far investigating authorities in many such cases, including that of NSEL, have attached properties, cash, bank accounts, stocks, shares and so forth but not the brand itself.

So far in this case, the police has attached assets worth Rs 4,565 crore. These include assets of NSEL’s promoters and directors, apart from those of borrowers.

Currently, EOW is also looking at brokers’ involvement; investigations are still on.

A court on Friday granted bail to Lotus Refineries’ director Arun Kumar Sharma, one of the NSEL borrowers.

(Sourced from Business Standard .)