)
The Economic Offences Wing (EOW) of the city police summoned Jignesh Shah, chairman and group chief executive of Financial Technologies (India) Limited, or FTIL, for further interrogation in the Rs 5,600-crore scam at subsidiary National Spot Exchange Ltd (NSEL).
The FTIL stock hit its upper circuit limit of 10 per cent at Rs 298.5 on the BSE on Wednesday, up 10 per cent over the previous close. An official said a few more facts surfaced after interrogating Shah. The recording of the statements lasted for three-four hours till late evening.
The EOW is looking to summon brokers to investigate their role in trading in paired contracts. The Maharashtra Protection Of Interest Of Depositors court on Wednesday ordered the income-tax department to defreeze the Rs 59.5 crore cash in the account of Mohan India, one of the largest defaulters, and deposit it in NSEL's escrow account for distribution among investors. The court also ordered the enforcement directorate to unfreeze Mohan India’s assets so those could be monetised to repay dues as committed in the settlement agreement.
FTIL, directors under lens
The EOW said it was probing the role of the promoter, FTIL, its directors and even some brokers in the NSEL fraud. The final report would be filed later under Section 173 (8) of the criminal code.
This was revealed by the EOW in the chargesheet filed against some borrowers, former managing director and other officials of the NSEL. The first chargesheet was against the five in judicial custody. FTIL, chief Jignesh Shah and other directors didn’t figure in that. In the chargesheet, the police said Lotus Refineries and NK Proteins had floated bogus companies and issued fake warehouse receipts to the NSEL regarding the stock with them and on which they borrowed money from the NSEL investors using the exchange’s platform.
The chargesheet said NSEL's former employee Amit Mukherjee had created and issued fake warehouse receipts without adequate physical stocks of commodities, as well as arranged loan facilities against the guidelines. The chargesheet also said Mukherjee was the “key management person” who perpetrated the fraud with Anjani Sinha, former managing director and chief executive, and mastermind of the Rs 5,600-crore scam. Mukherjee also got kickbacks from the borrowers for the arrangement of the loan. Jai Bhaukhandi, a former employee, has been blamed in the chargesheet for flouting the norms and guidelines of the exchange with Anjani Sinha in respect to delivery-based contracts, for creating fake warehouse receipts and cheating investors. The police in the first chargesheet said Sinha had misled and misinformed the general public by giving wrong information to the commodity derivatives markets regulator, Forward Markets Commission, and other agencies.
