The NSEL, promoted by Jignesh Shah-led Financial Technologies, has been facing problems in settling Rs 5,600 crore dues of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on the government’s direction.
“An FIR was registered today against the NSEL promoters, directors and defaulters on charges of cheating, forgery and breach of trust among others,” an official at Economic Offence Wing (EOW) of the Mumbai Police told PTI.
Swinging into action following the Mayaram committee report that implicated the exchange and its promoters, the authorities conducted searches at 184 locations across 16 states, including Mumbai residences of Jignesh Shah, chairman and managing director of Financial Technologies, and Joseph Massey, managing director and CEO of MCX Stock Exchange.
While Shah could not be reached for comments, Massey, denied any raid at his residence. “While I clarify that there was no raid at my house, I want to say that I am willing to cooperate fully with the police in the investigations,” Massey told PTI.
A special investigating team (SIT) had been formed to conduct a preliminary inquiry after complaints from a couple of investors against NSEL, the EOW official said.
The inquiry concluded that it was a criminal offence following which the FIR was registered, the official added. The SIT conducted its inquiry after receiving crucial inputs from the commodity market regulator Forward Markets Commission and Registrar of Companies, the official said.
BJP leader and Investors Grievances Forum president Kirit Somaiya had also recently filed a PIL in the Bombay High Court stating that NSEL forged/manipulated documents regarding stocks and liquidity and allowed some of the companies to pledge the same stock with more than one financial institution.
Somaiya has also alleged that government officials and politicians connived with NSEL to cheat investors. There are 24 buyers/members who have to pay Rs 5,600 crore to the spot exchange for settling dues of the investors.