MCX-SX scam: CBI arrests FTIL promoter Jignesh Shah

The CBI on Tuesday arrested founder of Financial Technologies India Ltd (FTIL), Jignesh Shah, in connection with its investigation into the alleged irregularities in granting sanction to the MCX Stock Exchange (MCX-SX) in 2009-10.

Sources said Shah was declared arrested during questioning at the CBI office in Mumbai. “The agency sleuths decided to arrest him when he failed to satisfactorily reply to the questions put before him. He was giving conflicting versions during questioning,” sources said. He is likely to be produced before a designated court in Mumbai on Wednesday. Talking to reporters in Delhi, CBI spokesperson R.K. Gaur said, “The CBI on Tuesday arrested a promoter of two Mumbai-based private companies and conducted searches at nine places in Mumbai, including the residence and office premises of the said promoter.”

Mr Gaur said incriminating documents, including transfer of shares by private companies and purchase of assets, were recovered during searches which are being scrutinised for further investigation. The agency sleuths on Tuesday conducted searches at nine locations in Mumbai, including the premises of Shah, FTIL, MCX, senior SEBI officials — executive director Muralidhar Rao, DGM Rajesh Dangeti and AGM Vishakha More — and a former executive director of SEBI, J. N. Gupta, in connection with the case registered in 2014. The CBI had filed the FIR in the case under IPC sections related to criminal conspiracy and cheating besides provisions of Prevention of Corruption Act for alleged abuse of official position.

The agency had alleged that promoters of MCX-SX had entered into a buy back arrangement with a nationalised bank in violation of Securities Contract Regulation Act, 1956 and Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Share-holdings in Recognised Stock Exchanges) Regu-lation, 2006. CBI had alleged that Shah, in connivance with SEBI officials, suppressed this material fact while applying for extension of recognition of the stock exchange, to conduct trade in currency derivatives, and fraudulently obtained the extension of recognition of the exchange in 2009 by cheating SEBI.