CBI Arrests Jignesh Shah In Connection With Grant Of Licence To MCX-SX
Earlier in the day, CBI conducted raids on offices of Financial Technologies and MCX.
The Central Bureau of Investigation (CBI) on Tuesday arrested Jignesh Shah, the founder and promoter of 63 Moons Technologies Ltd., formerly known as Financial Technologies Ltd., in connection with the grant of licence to the Multi Commodity Stock Exchange Ltd. (MCX-SX) by market regulator SEBI. MCX-SX is now known as the Metropolitan Stock Exchange of India Ltd. (MSEI).
MCX-SX is the stock trading arm of 63 Moons Technologies, which began trading in 2008 and gained recognition as a stock exchange in 2012.
Although the press release issued by the CBI did not name Jignesh Shah, a spokesperson of the investigating agency RK Garg told BloombergQuint that Shah has been arrested under sections 120B and 420 of the Indian Penal Code (IPC).
Section 120B deals with criminal conspiracy while Section 420 pertains to cheating.
The agency had “arrested a promoter of two private companies and conducted searches at nine places in Mumbai, including the residence and office premises of said promoter of two Mumbai-based private companies, the then executive director of SEBI and others,” the CBI release said, without naming 63 Moons Technologies and MCX-SX. Incriminating material pertaining to transfer of shares by the two private companies, fixed deposit receipts, purchase of assets were recovered during searches, are being scrutinised for further investigation, the release added.
One former and three current SEBI officials are being investigated under the Prevention of Corruption Act (POCA) for their alleged connivance with MCX-SX in fraudulently allowing renewal of recognition to the exchange to conduct trade in currency derivatives in 2009-2010, according to the same release.
The four officials of the Securities and Exchange Board of India who have been named in the CBI First Information Report and whose homes were raided on Tuesday include Executive Director Muralidhar Rao, Deputy General Manager Rajesh Dangeti and Assistant General Manager Vishakha More, and former Executive Director JN Gupta, CBI spokesperson Garg told BloombergQuint.
Both 63 Moons Technologies and MCX-SX later issued media releases confirming that their offices were searched by the CBI earlier on Tuesday.
This is the third time Shah has been arrested by enforcement agencies. He was arrested by the Economic Offences Wing of the Mumbai Police in May 2014 and granted bail by the Bombay High Court three months later in connection with the Rs 5,600 crore National Spot Exchange Ltd. scam.
On July 12 this year, he was arrested by the Enforcement Directorate (ED) on charges of money laundering and for alleged not cooperating with their NSEL related investigations. He was granted bail a month later.