The Economic Offences Wing (EOW) of Mumbai Police on Tuesday moved to recover a substantial part of the Rs 5,575 crore owed by National Spot Exchange Limited (NSEL) to investors, attaching properties and shares of promoters and directors of the exchange - inclusive of Jignesh Shah properties.
Separately, sources suggest that the Forwards Market Commission (FMC) is likely to issue a show-cause notice to the auditors of NSEL, asking them to clarify their role in the NSEL fiasco. It is believed that notices could be sent to Mukesh P Shah — the statutory auditor of the spot exchange for 2012-13 — and SV Ghatalia & Associates, an Ernst & Young (E&Y) affiliate, which audited the NSEL books for the previous two financial years.
Sources added that even E&Y may be served a notice for a report prepared by the firm on the risks associated with the spot exchange in September 2012 at the behest of Geojit Comtrade.
Among the assets attached on Tuesday are three properties owned by Jignesh Shah, chairman and group CEO of Financial Technologies India Ltd (FTIL), the promoter of NSEL. Two of these properties are in Mumbai’s Juhu and Aarey Colony areas while the third is in Pune. No value has been ascribed to these properties.
In addition, 1.19 lakh shares of FTIL and 5 lakh shares of the Indian Energy Exchange that are held by Shah have also been attached. Based on the closing price of R169.50 per share, the attached FTIL stock is worth Rs 2 crore. Shah held 83.29 lakh shares of FTIL as of September 30, amounting to an 18.03% stake in the company.
“We have also seized Jignesh Shah’s fixed deposits worth Rs 11 crore with HDFC Bank and five demat accounts whose value is still being evaluated,” said Rajvardhan Sinha, additional commissioner of police, EOW.
The EOW also attached two flats owned by Joseph Massey — the former MD and CEO of MCX-SX — along with 98 lakh shares that Massey held in MCX. In the case of former