Financial Tech chairman Jignesh Shah arrested in fraud probe

MUMBAI Wed May 7, 2014 9:32pm IST

Multi Commodity Exchange (MCX) Managing Director Jignesh Shah (L) speaks with New York Stock Exchange (NYSE) Euronext President Catherine Kinney during a news conference in Mumbai February 15, 2008. REUTERS/Punit Paranjpe/Files

Multi Commodity Exchange (MCX) Managing Director Jignesh Shah (L) speaks with New York Stock Exchange (NYSE) Euronext President Catherine Kinney during a news conference in Mumbai February 15, 2008.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The chairman of Financial Technologies (India) Ltd, Jignesh Shah, was arrested on Wednesday as part of an investigation of fraud at a commodity exchange owned by the bourse operator, a Mumbai police official said.

Shah has been under police investigation since August after National Spot Exchange Ltd (NSEL), the commodities exchange owned by Financial Technologies, abruptly suspended trade in most of its commodities contracts on July 31.

Investigations by commodities regulator the Forward Markets Commission showed what it said was a 55 billion rupee ($916 million) fraud, as the exchange defaulted on obligations to market participants because it did not have enough collateral.

Rajvardhan Sinha, additional commissioner in the Mumbai police unit that investigates white collar crime, said Shah had run "a criminal conspiracy with other accused who were running this exchange", referring to NSEL.

A Financial Technologies spokeswoman said the company was working on a statement regarding the matter.

Financial Technologies and Shah have previously denied knowledge of any fraudulent activity at NSEL, which ceased operations in August.

Shah's arrest is the latest blow to Financial Technologies, which also sells trading software.

The company was ordered by the market regulator in March to cut its stake in a separate commodities exchange, Multi-Commodity Exchange of India Ltd (MCX), from 26 percent to 2 percent.

The commodities regulator had ruled that MCX was not "fit and proper" to run a bourse.

Financial Technologies subsequently announced it would sell the 24 percent MCX stake, although it has not yet completed the sale.

(Writing by Rafael Nam; editing by Tony Munroe and Tom Pfeiffer)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage