“Shah was questioned about the facts that had emerged in our investigation”.
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Jignesh Shah, former chairman and founder of Financial Technologies India Ltd, was arrested on Tuesday by the Enforcement Directorate (ED) for alleged money laundering at the company’s subsidiary National Spot Exchange Ltd (NSEL), according to media reports.
The ED had prosecuted NSEL and 67 others in March past year in connection with the fraud. Just last week, the special PMLA court had summoned all the accused in the case filed by the ED.
ED, a specialized financial investigation agency under the ministry of finance, has found evidence of money laundering against Shah under the Prevention of Money Laundering Act, 2002 (PMLA), ED officials said.
After investigating agencies dug into NSEL’s books and computers, they came across several suspicious transactions which pointed towards money laundering.To help investors whose money is stuck in the scam, the government has also ordered merging NSEL with cashrich FTIL, against which the company and Shah have moved the court. He was arrested by the Economic Offences Wing of the Mumbai Police in May 2014 and granted bail by the Bombay High Court in August.
This is the second time Shah has been arrested in connection with the NSEL fraud.
Shah was also named in the first charge sheet filed by the ED in this case a year ago. “We fail to understand why such a coercive step has been taken by the Enforcement Directorate”, a spokesperson of 62 Moons said.
The agency filed a 20,000-page charge-sheet against NSEL and 67 others in the court here in March 2015.
Jignesh Shah has been under the scanner of the investigating authorities ever since National Spot Exchange Ltd (NSEL) went bust in 2013, causing loss of Rs 5,610 crore of investors’ money.
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The exchange could not settle the outstanding trades, sparking investigations by the police and regulators to find out whether the exchange had defrauded traders by not enforcing rules requiring sufficient collateral to be set aside. This led to major crisis in repayment of those who had invested in these stocks.
