Financial Tech's Jignesh Shah 'highest beneficiary' of NSEL fraud: FMC
Rubbishing Shah's claims that he was a victim of employee fraud, the commission said he benefited from the profits of NSEL that surged on the illegal paired contracts and the skyrocketing market capitalisation of his listed entities.<br /><br />
The Forward Markets Commission has ruled Financial Technologies founder Jignesh Shah as not being 'fit and proper' to hold a management of board position in any government/FMC recognized bourse. The same holds true for former MCX directors Joseph Massey and Shreekant Javalgekar.
The order follows a probe into the Rs 5500 crore fraud at National Spot Exchange, a subsidiary of Financial Technologies.
FMC has also said that Jignesh Shah was the biggest beneficiary of the fraud at Naional Spot Exchange (NSEL).
Rubbishing Shah's claims that he was a victim of employee fraud, the commission said he benefited from the profits of NSEL that surged on the illegal paired contracts and the skyrocketing market capitalisation of his listed entities.
According to CNBC-TV18, FMC also said he management and governance of NSEL was practically carried out by Jignesh Shah through the vehicle of FTIL.
"Jignesh Shah was practically the highest beneficiary of the fraud perpetrated at the NSEL Exchange. It is because of the huge profit of Rs 125 crore (approx.) earned by NSEL during FY 2012-13 that the value of the shares of Jignesh Shah in FTIL shot up manifold giving him the benefit of a spectacular market capitalization of his investment in FTIL running into thousands of crores of rupees.
Jignesh Shah has been named as one of the key management personnel in all the annual reports of NSEL until financial year.
The order further added that Shah misused his position as the promoter "to create confidence in the minds of the participants regarding the legitimacy of the business and its operations in the exchange platform of NSEL."
"Shah consciously used his position to represent to the public at large about the attractive features of the contracts being traded on NSEL platform while taking no steps to introduce any effective governance mechanism including risk management, due diligence, assured collaterals etc., to ensure the legitimacy of his claims and to prevent frauds," the order stated
The Economic Offences Wing (EOW) of the Mumbai Police have frozen personal accounts of Jignesh Shah, promoter NSEL and Joseph Massey, Former MD and CEO of MCX-SX , as part of the ongoing Rs 5,600-crore settlement crisis at the National Spot Exchange (NSEL), reports fe Bureau in Mumbai.<br /><br />
Financial Technologies promoter Jignesh Shah has managed to convince the MCX board and will continue to stay on board for now till the Forward Market Commission decision on the 'fit and proper' status of the Financial Technologies promoter. <br /><br />
The shares were sold on average price of Rs 752.83 apiece valuing the transaction at Rs 153.64 crore.<br />