 "ED files money laundering case against NSEL, Shah's properties under scanner")
In a fresh development in NSEL’s Rs5,600 crore scam, the Enforcement Directorate (ED) on Mondayregistered a preliminary inquiry into the payment crisis,suspecting large-scale money laundering in the beleagueredspot exchange, a senior official said.
The Enforcement Directorate (ED), the agency which looks into foreign exchange violations and money laundering, also registered a case against the National Spot Exchange Ltd, its promoters including Jignesh Shah, and directors under the Prevention of Money Laundering Act (PMLA). According to a CNBC-TV18 report,the ED has filed charges which include criminal conspiracy under section 120 (b) and forgery. Under the Prevention of Money Laundering Act (PMLA), the ED can exercise its powers to attach properties and assets of NSEL promoters, directors and Financial Technologies too.
[caption id=“attachment_1103077” align=“alignleft” width=“380”]  ndia’s Multi Commodity Exchange (MCX) Managing Director Jignesh Shah. Reuters[/caption]
An FIR was filed on September 30 by EOW against JigneshShah, Chairman and Managing Director of Financial Technologies(FT), and Joseph Massey, Managing Director and CEO of MCXStock Exchange, which is promoted by FT, and other promoters,directors and defaulters.All of them were charged with cheating, forgery,
breach of trust and criminal conspiracy, among others, inconnection with the payment crisis at the National SpotExchange (NSEL), promoted by Shah-led Financial Technologies.The next day the Central Bureau of Investigation (CBI)had registered a preliminary inquiry to look into all aspectsof the scam comprehensively.
According to a CNBC-TV18 report, the Economic Offences Wing (EOW) of Mumbai Police is contemplating flexing muscles against Jignesh Shah, the Chairman and CEO of the Financial Technologies Group.Sources told CNBC-TV18 that the EOW is currently considering the invocation of the Maharashtra Protection of Interest of Depositors Act (MPID Act). MPID was enacted in 1999 with the aim of the tackling financial institutions that are believed to be acting in a calculated, pre-determined manner designed to hurt the interests of depositors or investors.
Upon invocation, this Act will allow the EOW to attach or seize properties and assets of not merely National Spot Exchange Limited (NSEL) but also those of promoter Jignesh Shah. Moreover, the EOW would also have the powers to the conduct auction and realise the money for satisfying payments defaulted upon by the establishment in question.
Impact Shorts
More ShortsNSEL has been facing problems in settling Rs 5,600crore dues of 148 members/brokers, representing 13,000investor-clients, after it suspended trade on July 31 on
government’s direction.Last week, Mumbai police had arrested two persons inconnection with the scam.
On October 9, police arrested Amit Mukherjee,assistant vice-president of the exchange and next day arrestedJay Bahukhundi, a former assistant vice-president and
in-charge of know your customer (KYC) department that istasked with verification of borrowing companies and investorsetc at NSEL.
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