NSEL crisis: Mumbai police raid Jignesh Shah's office, residence
The Economic Offences Wing at Mumbai of Mumbai Police today lodged FIRs against the National Spot Exchange Ltd's (NSEL) promoters including Jignesh Shah, the board of directors and key employees and are currently carrying out searches and raids in the offices and residences in 180 places across the country in connection with Rs 5,600 crore payment crisis.<br /><br />
The Economic Offences Wing at Mumbaiof Mumbai Police todaylodged FIRs against the National Spot Exchange Ltd's (NSEL) promoters including Jignesh Shah, the board of directors and key employees and are currently carrying out searches and raids in the offices and residences in 180 places across the country inconnection with Rs 5,600 crore payment crisis.
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 economic offences wing also searched the residences of Jignesh Shah, chairman and managing director of Financial Technologies, and Joseph Massey, managing director and CEO of MCX-SX, in connection with the payments crisis at National Spot Exchange Ltd (NSEL), an EOW official said.
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 tocooperate fully with the police in the investigations," Massey told PTI.
Last week a 32-page preliminary inquiry (PE) report was submitted to EOW additional commissioner of police Rajvardhan Sinha, and it found that there were evidence of financial fraud at the commodity bourse promoted by Jignesh Shah-controlled Financial Technologies group.
Central agencies like ED, income-tax department, etc, have already submitted their reports on the fiasco to Arvind Mayaram, secretary, economic affairs, who then presented the findings of violations by NSEL to the finance minister.
Mayaram committee report implicated the exchange and its promoters, following which which the authorities conducted searches at 184 locations across 16 states.
FIRs have also been lodged against NSEL's parent company Financial Technologies and their directors, 25 borrowers, some defaulters, the promoters and directors of defaulters and some brokers in connection with the payment crisis, sources told CNBC-TV18.
Shares of Financial Technologies ended down 6.43 percent at Rs 141.10 following the raid.
NSEL, however, said that both Financial Technologies and NSEL will cooperate fully and welcome any action taken by the government and authorities.
A special investigating team (SIT) had been formed to conduct a preliminary inquiry after complaints from a couple of investors against NSEL.
The inquiry concluded that it was a criminal offence following which the FIR was registered.
The SIT conducted its inquiry after receiving crucial inputs from the commodity market regulator Forward Markets Commission and Registrar of Companies.
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 regardingstocks 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.
With inputs from PTI
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