Jignesh Shah, former chairman and founder of Financial Technologies India Ltd, was arrested on Tuesday by the Enforcement Directorate (ED) for alleged money laundering at the company's subsidiary National Spot Exchange Ltd (NSEL), according to media reports.
This is the second time that Shah has been arrested in connection to the case. In August 2014, Shah was released on bail three months after he was arrested by the Mumbai Police. In the latest charge sheet, the ED has alleged a criminal conspiracy in relation to the ₹5,574.35 crore scam at NSEL, and for duping thousands of investors.
According to media reports, Shah has been arrested for not cooperating with the investigative process. An ED official toldThe Indian Express, "We have unearthed a number of sham transactions of Shah and companies associated with him. We had questioned Shah on these transactions but he did not co-operate with the probe."
Shah is due to appear in a special court under the Prevention of Money Laundering Act (PMLA) on Wednesday. The court will take into consideration any bail requests.
Last year, the ED, in a charge sheet, named Shah among 68 people under money laundering laws, alleging that Shah had been in neglect of the requisite checks and balances as the director of National Spot Exchange, a commodities exchange subsidiary of Financial Technologies, which was rebranded subsequently to 63 Moons Technologies.
In 2013, NSEL was ordered to halt trading after it was found that fake contracts were behind at least 13,000 borrowings, triggering a payments crisis at the exchange. The borrowed money was allegedly siphoned off overseas or into real estate deals.
A 63 Moons spokesperson has said, "We fail to understand why such a coercive step has been taken by the Enforcement Directorate when Mr. Shah has been fully co-operating with the investigation and has been going every time he has been called, including today, especially when ED's own complaint has failed to establish any money trail to either Mr. Shah or 63 moons. We have full faith in Indian judiciary and sincerely believe that truth will prevail."