Problems for Jignesh Shah, promoter of National Spot Exchange (NSEl), are on a rise as the Economic Offence Wing (EOW) of Mumbai police on Monday carried out search operations in his office and residence.
Apart from him, the police also searched offices and residences of directors and defaulting brokers. An Fir was also filed against them in connection with Rs 5,600 crore payment crises that has been haunting the NSEl.
As per sources, Jignesh Shah can soon be arrested as the company failed to pay back its investors. EOW officials said, “An FIR was registered today against the NSEl promoters, directors and defaulters on charges of cheating, forgery and breach of trust among others.”
The NSEl, promoted by Jignesh Shah-led Financial Technologies, has been facing problems in settling Rs 5,600 crore dues of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on the government’s direction.
The police carried out searches at 184 locations across 16 states, including Jignesh Shah’s Mumbai residences and Joseph Massey, Managing Director and CEO of MCX Stock Exchange.
While Shah could not be reached for comments, Massey, denied any raid at his residence. “While I clarify that there was no raid at my house, I want to say that I am willing to cooperate fully with the police in the investigations,” Massey told news agency PTI.
BJP leader and Investors Grievances Forum president Kirit Somaiya had also recently filed a PIl in the Bombay High Court stating that NSEl forged/manipulated documents regarding stocks and liquidity and allowed some of the companies to pledge the same stock with more than one financial institution. Somaiya has also alleged that government officials and politicians connived with NSEl to cheat investors. There are 24 buyers/members who have to pay Rs 5,600 crore to the spot exchange for settling dues of the investors.
Meanwhile, Financial Technologies India ltd, parent company of both NSEl and MCX, said in a BSE filing that it would co-operate with the government authorities in the investigation. “Today, EOW officials initiated searches on the 24 borrowers’ premises across the country. EOW has also searched NSEl premises today. We welcome any action by the government authorities. It is to help recover the money from the borrowers,” the statement added.
On the other hand, lotus Refineries on Monday filed a claim suit worth 52,773.29 crore against NSEl in the Bombay High Court on grounds that NSEl was lying about goods stored in various warehouses. The firm also requested the court that NSEl should be restrained from disposing of its assets.