MCX-SX Case: Jignesh Shah Remanded To Judicial Custody Till October 10
Shah has been in police custody since he was arrested on September 21.
A special CBI court on Monday, September 26, remanded Jignesh Shah to judicial custody till October 10. Shah has been in police custody in connection with the renewal of licence to MCX-SX by market regulator SEBI in 2010.
Jignesh Shah, the founder of 63 Moons Technologies Ltd. (formerly known as Financial Technologies Ltd.), was arrested by the Central Bureau of Investigation on September 20.
While the Central Bureau of Investigation sought another five days of police custody in light of Shah’s non-cooperation, his lawyer Amit Desai argued vehemently that the case was heavily reliant on documentary evidence – by way of bank documents and papers available with market regulator Securities and Exchange Board of India – all of which were in the possession of the investigative agency. His client’s custodial interrogation was, therefore, unnecessary, Desai argued.
Shah’s lawyers then moved a bail application which was rejected by the court. The final order will be available on September 27.
MCX-SX, the stock trading arm of 63 Moons Technologies, was given conditional approval by SEBI to trade in currency derivatives in 2008. The approval was subject to the two promoter shareholders – MCX and then Financial Technologies – divesting stake to less than 5 percent, according to SEBI norms. At the time, MCX held 51 percent stake in MCX-SX while Financial Technologies held 49 percent.
One of the methods by which the promoter shareholders divested stake was through a buyback agreement with Punjab National Bank and Infrastructure Leasing and Finance Corporation Ltd.
Special CBI public prosecutor Chetan Nandode told the court on September 21 that Shah was allegedly involved in the suppression of information to the Securities and Exchange Board of India regarding that buyback agreement.
The CBI remand application, that BloombergQuint has accessed, said that “Jignesh Shah has not disclosed the true facts as to how he managed to secure renewal of recognition, whether he paid any illegal gratification to SEBI officials and what was the amount of wrongful gain he made out of the dishonest and fraudulent act.”