The Economics Offences Wing of the Mumbai Police filed its fifth chargesheet in the National Spot Exchange Ltd. scam in the last week of August, alleging that founder Jignesh P Shah, his family members, confidantes and associates were involved in trying to induce brokers with promises of high returns, according to a copy of the document.
The chargesheet was filed in the Maharashtra Protection of Interest of Depositaries Court, which is likely to hear the matter on September 20.
Earlier this year, the Bombay High Court had directed the Mumbai police commissioner to file an affidavit stating that the investigation had been completed and to file a chargesheet in a time-bound manner.
The court’s directive came after 63 Moons Technologies, a company founded by Shah, filed a writ petition about the inordinate delay in this matter.
63 Moons Technologies was formerly known as Financial Technologies (India) Ltd., the parent company of the now-defunct NSEL. The spot exchange suspended trading in July 2013 following a payments crisis estimated at Rs 5,600 crore.
The EOW charged Shah with inducing brokers at a seminar in Ahmedabad in 2008 while assuring them of high returns from trading on the NSEL. According to the chargesheet, the EOW has recorded the statements of several brokers. A similar charge was made against Shah’s brother and fellow-director Manjay P Shah.
Other allegations include being party to criminal conspiracy, generation of fictitious trades and forged warehouse receipts, misuse of settlement guarantee funds, and misappropriation of investments of investors.
63 Moons said the court had yet to take cognisance of the chargesheet. The company said in reply to an email from Moneycontrol that it is in the process of filing a complaint with the EOW for “selective leakage/theft of confidential documents from Govt. office/agency.”
“We will be in position to respond to your query only, if you have authentic/official document in your possession and we get the same document from Hon’ble Court or EOW. We refrain from commenting on unofficial/unauthenticated source of document/information,” an official of 63 Moons said in the email.
The NSEL scrapped all contracts greater than the T+10 settlement period in 2013 after the Department of Consumer Affairs issued a notice about forward contracts on the exchange exceeding the T+11 settlement limit. This shut out all arbitrage opportunities and it later emerged that NSEL’s godowns had no stocks of commodities to back the contracts and that fake warehouse certificates had been issued to buyers.
Paras Ajmera, a confidante and relative of Jignesh Shah, has been charged with being aware of the inadequacy of stocks in NSEL warehouses in his capacity as director of the National Bulk Handling Corporation.
The EOW recorded the statement of Anil Chaudhary, former managing director of NBHC, who is reported to have revealed what transpired during an “informal meeting” in May 2013 and the failed attempt to hand over control of NSEL warehouses to the Warehousing Development and Regulatory Authority- registered group subsidiary NBHC, which was later sold.
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