It is alleged that the accused had helped Multi Commodity Exchange of India (MCX) in getting the status of nationwide commodity exchange, even though MCX was not fulfilling the stipulated criteria
The Central Bureau of Investigation (CBI) has registered a case against 63 Moons' — formerly Financial Technologies — former chairman Jignesh Shah, four former chairpersons of Forward Market Commission (FMC) and 6 others for irregularities in the launch of Multi Commodity Exchange (MCX), sources told Moneycontrol.
Prior to being merged with SEBI, FMC was the commodities market regulator.
It is alleged that the accused had helped Multi Commodity Exchange of India (MCX) in getting the status of nationwide commodity exchange, even though MCX was not fulfilling the stipulated criteria.
Bishnu Khatua, Keval Ram, Anand Kumar Bhat, Rajeev Kumar Agarwal have been named in the FIR, sources told Moneycontrol.
The investigation agency has conducted searches today at 9 locations in Mumbai, Gwalior and Shimla.
The raids also took place at the premises of Jignesh Shah and former MCX MD Joseph Massey.
"The search by the CBI today was in connection with the matter of permission granted to the MCX in 2003. We find this surprising because the permission was granted 15 years ago when the country did not have a pan-India commodity exchange. The permission to set up nationwide commodity exchange was not only granted to MCX but was also granted to 3 other entities - NCDEX, NMCE and N-BOT," said a spokesperson of 63 Moons.
"During the search at Mr Jignesh Shah's residence today morning, CBI did not find any single incriminating material and/or document. The agencies are being misled by vested interests and trying to divert the attention from the truth getting established and prejudice the minds of investigating agencies and ongoing judicial matters," the spokesperson added.
In August 2017, Jignesh had denied any violation of insider trading norms following a SEBI order against 13 entities, including his relatives, with regard to trading in shares of MCX and erstwhile FTIL even as he alleged "conspiracy" against him.
SEBI had ordered impounding of “averted losses” worth over Rs 125 crore through alleged insider trading in MCX and its erstwhile promoter FTIL by 13 persons, including relatives of Shah and former top executives, with ‘prior information’ about the NSEL case.
In April last year, MCX had planned to reopen old cases related to allegations of siphoning of funds in connivance with employees of the exchange.
The board — led by new chairman Saurabh Chandra — had planned reviewing cases where its employees were named in the forscenic audit report by PricewaterhouseCoopers (PwC).
The Income-Tax Department had come across transactions where money received as donation was routed back to the erstwhile promoters of MCX. In 2015, the I-T had sent a notice to MCX on this issue.
MCX, promoted by Jignesh Shah who is facing number of probes, had planned an IPO in 2009-10 but it was postponed because of global financial meltdown. Meanwhile, FMC brought in new regulations from which MCX sought exemptions to float an IPO again. The IPO became a gainer in 2012 despite poor market conditions.
The sources said the agency found these alleged irregularities while probing extension granted to MCX-SX stock exchange by SEBI. CBI had closed the probe against the then SEBI chief CB Bhave and former member KM Abraham even as it charged some SEBI officials and executives from the stock exchange and FTIL, promoted by Shah, the sources said.