Commodity market bull Jignesh Shah cuffed for con

Once touted as the wonder boy of the commodity markets, Jignesh Shah, chairman and chief executive officer (CEO) of Financial Technologies (India) Limited (FTIL), was arrested by the Economic Offences Wing (EOW) of the Mumbai Police in the Rs 5,600- crore National Spot Exchange Limited (NSEL) scam.

"We have arrested Jignesh Shah for his involvement in the NSEL scam," EoW sources told news agency PTI.

Besides, former head of Multi-Commodities Exchange Shreekant Javalgekar was arrested. With Shah's arrest, the total number of arrests in the scam has gone up to 11. The first arrest was Sinha's arrest last October.

The EOW had invoked provisions of Maharashtra Protection of Interest of Depositors Act.

The Central Bureau of Investigation is also investigating the case under the Prevention of Corruption Act with respect to investment made by two public sector companies in NSEL. The arrest came after Anjani Sinha, the arrested former CEO of NSEL, reportedly blamed Shah for the scam in an affidavit.

Sinha said that Shah took most of the important decisions at NSEL and wanted absolute control over the exchange in all matters. NSEL earned the bulk of its revenues for FTIL, Shah's flagship company, which holds 99.99 per cent stake in NSEL, and Shah was keen to enhance NSEL's revenues so as to compensate for the losses he incurred in his other financial ventures, Sinha had added.

Shah and his family together hold around 45.5 per cent in FTIL. With Shah's arrest, the total number of arrests in the scam has gone up to seven. The first arrest was Sinha's arrest last October.

"This is divine justice," said an excited Ketan Shah, 46, partner with Mumbai- based Conex Metals, exporter of engineering components, who is also an aggrieved investor. "The EOW has probably found enough evidence of his link in the scam." NSEL failed to pay investors in certain contracts they entered into with the exchange. It was later discovered that most of the underlying commodities never existed and the buying and the selling of commodities like steel, paddy and sugar was being conducted only on paper.