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A court here on Monday ordered judicial custody (jail) for Jignesh Shah, chairman of Financial Technologies (FT), and Shreekant Javalgekar, former managing director of the Multi Commodity Exchange (MCX) in connection with the Rs 5,600-crore National Spot Exchange scam (NSEL).
The public prosecutor had asked for this, stating the police needed more time for their interrogation as Shah was not answering many questions. While the custody order is till May 31, the court said it would hear the bail pleas of Shah and Javalgekar on Thursday, at the request of Shah’s lawyers.
The two had been in the custody of the city police’s economic offences wing (EOW) since May 7, on a charge of criminal conspiracy. The police says it has found the volumes of trades conducted at NSEL were linked with the income of FT and the promoter of NSEL was able to open other exchanges from the income generated through the NSEL platform. The arrests have been made under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act.
Javalgekar had been associated with FTIL for the past 10 years and his arrest was also due to his links with the Indian Bullion Market Association (Ibma).
The police have also been questioning Shah and him on Ibma’s transactions made on NSEL. The charge is that Ibma made losses on NSEL but due to the income from MCX, those losses were squared off and converted into profits.
The defence counsel in the bail plea hearing last week said Anjani Sinha, the former managing director of NSEL, was responsible for the scam. He said Shah was not involved in the day-to-day activities of the exchange and that there was a ‘China Wall’ between the board of directors and the management.
EOW started its investigation in September 2013, after 13,000 investors who lost their money in the scam had complained and a First Information Report was filed.
