In a setback to Enforcement Directorate, a Mumbai court today rejected its application for extension of the custody of FTIL founder Jignesh Shah, arrested in the Rs 5,600-crore NSEL scam, and sent him to judicial custody.
Special judge for cases under the Prevention of Money Laundering Act P R Bhavke remanded Shah in JC till August 1.
The ED had told the court that Shah was not cooperating with the investigation and had not disclosed the truth about parking of a huge amount of money.
"He is purposely even dishonouring his post, participation and control of NSEL which otherwise emerged in picture during investigation. He was the mastermind behind creation of not only NSEL but also several similar other exchanges in different segments," the remand application said.
Shah was the face of National Spot Exchange Limited and the alleged mastermind behind the unauthorised flow of huge money to the defaulters even during the last days of NSEL before suspension of its operation, it said.
The ED had recorded the statements of NSEL CEO Prakash Chaturvedi, director Padmanabhan Ramnath, director of India Infoline E P Prabhakaran, CEO of Geofin Comtrade Girish Dev, director of Systematix Group Sunil Sarda and MD, CEO of NBHC Anil Chaudhary.
Former CEO of NSEL Anjani Sinha did not appear before the ED officials when asked, so now the anti-money laundering agency has issued summons against him to which he is yet to respond, the agency said.
Chaudhary in his statement said that he was asked by the Financial Technologies India Limited (FTIL), also founded by Shah, to ascertain and take control of the stock of commodities of NSEL in early June 2013. Chaudhary said he had reported about the discrepancies in the NSEL operations.
"The claim made by Shah that he became aware of the NSEL problems only after the exchange was closed is false," ED said.
Shah's lawyer Aabad Ponda argued that as per the law, he
could not have been arrested for probe after the chargesheet had been filed.
"Shah was not an absconder. He was very much present, even came to the court and sought an exemption (from appearance)," Ponda argued.
Shah's application for bail would be heard on July 26.
The agency had registered a case in the NSEL scam under the PMLA in 2013 along with the Economic Offences Wing of the Mumbai police.
NSEL's payment troubles started after it was ordered by the Forward Markets Commission in July 2013 to suspend the spot trade in most of its contracts due to suspected violations.
The exchange could not settle the outstanding trades, prompting an investigation as to whether it had defrauded traders by not enforcing rules requiring sufficient collateral.
