Jignesh Shah biggest beneficiary of NSEL fraud, says FMC

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26 Aug, 2025 12:21

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The Forward Markets Commission has ruled Financial Technologies founder Jignesh Shah as not being 'fit and proper' to hold a management of board position  in any government/FMC recognized bourse. The same holds true for former MCX directors Joseph Massey and Shreekant Javalgekar.

Also Read: NSEL fraud: FMC directs FTIL to cut stake in MCX to 2%

The order follows a probe into the Rs 5500 crore fraud at National Spot Exchange, a subsidiary of Financial Technologies.

Excerpts from the FMC order on Jignesh Shah's role in the fraud and why he is the biggest beneficiary:

Remote control:

Behind the corporate veil, the management and governance of NSEL was practically carried out by Jignesh Shah through the vehicle of FTIL. 

Windfall gains:

Jignesh Shah was practically the highest beneficiary of the fraud perpetrated at the NSEL Exchange. It is because of the huge profit of Rs.125 crores (approx.) earned by NSEL during FY 2012-13 that the value of the shares of Jignesh Shah in FTIL shot up manifold giving him the benefit of a spectacular market capitalization of his investment in FTIL running into thousands of crores of rupees.

Vanishing act:

Jignesh Shah has been named as one of the key management personnel in all the annual reports of NSEL until financial year

2011-12. It appears that Jignesh Shah has got himself excluded from the list of key management personnel (in 2012-13) ostensibly to distance himself from NSEL when continuous defaults by members had thrown the company completely out of gear during this period.

Blame game:

FTIL and Jignesh Shah have tried to shift the entire blame on the former Managing Director, Anjani Sinha for committing. Strangely enough, it is the Board of Directors of NSEL who had showered praises on Shri Anjani Sinha in the Board Meeting held on 30.03.2012 for the performance of the company in FY 2011-12 and had congratulated him. This shows that Jignesh Shah and other Directors were aware of the activities of NSEL that resulted in such a dramatic turnaround and supported the performance of the management and the business model and practices that were being followed by NSEL management.

Abuse of position:

Jignesh Shah, as the promoter of FTIL and NSEL has misused his position to create a confidence in the minds of the participants regarding the legitimacy of the business and its operations in the exchange platform of NSEL.

Shah consciously used his position to represent to the public at large about the attractive features of the contracts being traded on NSEL platform while taking no steps to introduce any effective governance mechanism including risk management, due diligence, assured collaterals etc., to ensure the legitimacy of his claims and to prevent frauds.