Jignesh Shah Assisted NSEL Defaulters in Laundering Money: Enforcement Directorate
The Enforcement Directorate alleges that Jignesh Shah, Chairman of Financial Technologies India Ltd (FTIL), was “hand in glove “with defaulters of FTIL subsidiary National Spot Exchange Ltd. This allegation is in the remand application presented by the ED to a special court in Mumbai, a copy of which is with BloombergQuint.
The remand application was presented by the investigative agency on Wednesday before the anti-money laundering court which heard it and subsequently sent Jignesh Shah to five-day ED custody.
The ED alleged that when Shah was questioned in connection with the Rs 5600 crore at NSEL and the transactions by NSEL defaulters, he did not co-operate and refused to “divulge the truth which was apparent from his statement wherein he had taken shelter of selective amnesia or had passed the buck to others.”
His custodial interrogation had, therefore, become necessary, according to ED sources.
The ED application claimed that Shah laundered money owed to NSEL, through a series of ‘bogus and artificially exaggerated transactions’, back into FTIL. In court on Wednesday, the investigative agency submitted evidence of a money trail between FTIL and its three units – NSEL, National Bulk Handling Corp. (NBHC) and the Indian Bullion Market Association over which Shah had “absolute control”.
One example that the application cited, is IBMA’s transactions with NSEL defaulters, such as PD Agroprocessors Pvt. Ltd, White Water Foods and others, to the tune of Rs 106 crore, without “any underlying business or transfer of goods”.
The application also cited a statement recorded by FTIL’s chief financial officer on July 5, where he was unable to justify transactions between FTIL and NHBC, NSEL and NHBC and FTIL and NHBC, all done within a two day period in July 2013 – shortly before NSEL went belly up.