A Central Bureau of Investigation (CBI) special court on Wednesday remanded Jignesh Shah, founder of Financial Technologies India Ltd (FTIL), to CBI custody till September 26.
Shah was arrested in a case registered against four Securities and Exchange Board of India (Sebi) officials for connivance with MCX-SX to fraudulently allow renewal of its licence to conduct trades in currency derivatives in 2009-2010. The arrest followed CBI’s extensive searches at nine locations in Mumbai, including Shah’s residence and FTIL headquarters on Tuesday. Besides, a CBI team also searched the residences of Sebi officials including former executive director J N Gupta, assistant general manager Vishakha More, former whole-time member K M Abraham, among others.
During the hearing in court on Wednesday, the CBI counsel said Shah had misrepresented facts for getting licence for MCX-SX in 2004.
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It further said that the MCX-SX’s application dated April 7, 2010 seeking permission to operate in other segments was rejected by Sebi, but Sebi officials failed to take action for withdrawal of recognition of MCX-SX from operating in currency derivatives. “It is suspected that he (Shah) was hand-in-glove with Sebi officials to secure renewal of recognition of stock exchange to deal in currency derivatives,” said CBI in the remand copy.
CBI said that in 2009, while issuing buyback warrants, promoters of FTIL and Multi Commodity Exchange were trying to control economic interest in MCX-SX. He also alleged that Shah had suppressed material facts of buyback arrangements via warrant to Sebi.