ED to book Jignesh Shah in money laundering case

Fresh trouble seems to be brewing for Jignesh Shah, founder of Financial Technologies India Ltd (FTIL), as the Enforcement Directorate (ED) is all set to book him under the stringent provisions of the Money Laundering Act to probe the alleged irregularities in granting sanction to the MCX Stock Exchange (MCX-SX) in 2009-10. The ED has already booked Mr Shah in the `5,600 crore National Spot Exchange Limited (NSEL) scam.

Sources said, "The ED has sought FIR from the CBI, which recently arrested Mr Shah in connection with MCX-SX scam. The directorate will register another FIR against Mr Shah under the Prevention of Money Laundering Act, 2002, on the basis of case registered by the CBI". A fresh case against him will be registered very soon, they added.

"There are allegations that the promoters of MCX-SX had entered into a buyback arrangement with a nationalised bank in violation of the Securities Contract Regulation Act, 1956, and Securities Contract (Regulation, Manner of Increasing and Maintaining Public Shareholdings in Recognised Stock Exchanges) Regulation, 2006. It is also alleged that MCX founder in connivance with SEBI officials, deliberately 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," sources said. It is also suspected that SEBI officials deliberately did not issue notice to the stock exchange for cancellation of its recognition in the currency derivatives, when SEBI had already rejected request of the same stock exchange for trading in other segments, they said. The ED recently attached property worth `1,170 crore in the NSEL case.