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Rediff.com  » Business » NSEL's Rs 720-cr sugar stock turned into a multi-storey mall

NSEL's Rs 720-cr sugar stock turned into a multi-storey mall

September 02, 2013 08:43 IST

A much-vacant mall in a sleepy industrial park is all that’s left of the amount allegedly owed by Mangla Shree Properties against 0.2-mt sugar deliveries


Farm houses and weekend resorts line up on the busy Grand Trunk Road as it winds towards the Singhu border in Northwest Delhi. A three-km drive through a smaller road that cuts to the left leads to Narela Industrial Park, which is promoted by Delhi State Industrial and Infrastructure Development Corp (DSIIDC). At 10:30 am, the park is still waking up from its slumber, with a few truck drivers trying to get out of their overnight parking lots and labourers sipping tea.

Amid numerous non-descript, dusty two-storey buildings housing small industries, a structure stands out. A mall that stands on plot number D-1,669 is an impressive structure with tiled perimeter and decorative plants. It’s probably the only building in the neighbourhood with glass walls and doors — something atypical of an ‘industrial’ estate.

The words ‘MSP Mall’ are embossed in huge red and white letters above the main entrance. MSP stands for Mangla Shree Properties, a company floated in 1999. And, its address is the same as that of a defaulting National Spot Exchange Ltd (NSEL) client. According to NSEL, Mangla Shree Properties had an outstanding of Rs 720 crore (Rs 7.2 billion) towards pay-in obligations through Mohan India, a clearing member of the exchange.

Simply put, according to NSEL, Mangla Shree has to pay Rs 720 crore for 200,000 tonnes of sugar it bought from the exchange. But, the only sugar in the entire premises is probably the few kilos stocked by Garg store, a provision store in the mall.

Harishankar, an official of Employees State Insurance Corporation (ESIC), which has a branch office in the mall, said: “Since we moved in a few months ago, we have not seen any sugar godown or sugar consignment in the premises.” The ESIC branch opened on the second floor of the mall in May this year.

Though furnished with see-through elevators and escalators, most of the 100-odd shops are vacant and the mall itself is deserted. It is difficult to comprehend why somebody would put up a steel-and-glass mall in the middle of an industrial complex populated with truck drivers and labourers and no shoppers in the vicinity.

Mohammed Shahid, who runs a tea shop near the mall, said: “This used to be a dirt-filled vacant place until about two years ago. This mall came up in quick time and has been there for about a year and a half. But, it’s mostly empty, but for a couple of readymade shops and a Nokia showroom.”

Officers from investigating agencies suspect all these suggest the sugar trade was just a cover to finance real estate operations of groups like Mangla Shree.

Anil Mangla, one of the owners, said he had not heard of NSEL or Mohan India until the previous day. “Our company or any of our family members never had anything to do with sugar trading. I am aghast that the exchange has put out our name, without even checking with us. I am going to file a police complaint against them.” NSEL’s release said the names and details of the clients were according to records of Mohan India, the sugar warehouse operator.

Mangla denied any link with Mohan India, but, according to the records of PNC Infratech, which manages Narela Industrial Park for DSIIDC, the plot D 1669, on which the mall now stands, is owned by one Mohanlal Jain. “We had bought the place from Jain on a power-of-attorney basis. I don’t think he is a director or is connected to Mohan India.”

Asked about the suggestions that the money borrowed from NSEL was invested in the mall and other properties,

Mangla said: “The mall is nowhere near Rs 720 crore. We have taken a loan of Rs 14 crore from our banks and those have turned NPAs (non-performing assets) due to the downturn. The banks have even initiated legal proceedings.”

He added: “You give me Rs 50 crore, I’ll transfer the mall in your name tomorrow,” suggesting the mall was not worth more than that.

According to details with the Registrar of Companies, Mangla Shree is controlled by three brothers — Mahesh Kumar Mangla, Rajender Prasad Mangla and Anil Mangla. Mahesh, Rajender and Santosh Mangla (Anil’s wife) are the company’s directors.

The company’s memorandum of association, which defines its business objects, does not have any reference to sugar trading or processing.

The brothers, who had been involved in commission-based real-estate deals for the past decade and a half in the Nerala area, claim the mall is the company’s only property.

“We don’t have any other. If we had taken Rs 720 crore, there should be some paper detailing that. Let them show the documents where we have signed. Nobody will give even Rs 10,000 without papers. How did they give away such a big amount?”

Mangla fears his family’s name has been misused by fraudsters.

“It is matter of investigation. Let them check the bank records, documents. We can show our bank records with Bank of Baroda and Oriental Bank of Commerce. Those will show we never received such a huge sum.”

N Sundaresha Subramanian in Narela
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