NO MONEY TRAIL FOUND AGAINST JIGNESH SHAh

National Spot Exchange Limited (NSEL) crisis broke in July 2013

When the crisis broke all the trades were halted by Forward Markets Commission (FMC)

FMC as regulator of forward markets had no jurisdiction over a spot exchange

An exchange is supposed to be regulated by the Ministry of Consumer Affairs

NSEL Crisis

FMC’s order to close the market immediately was calamitous

It created panic leading to a settlement failure of 5,600 crore

Livid brokers wanted to know that if FMC was

not clear on the status of the exemption & on what basis did it issue the show cause notice to NSEL

FMC’s Role

Also why didn’t FMC ask the market to be closed in May 2012 when the crisis was first reported

In 2012, the total volumes of trading on NSEL hovered around 2,000 crore

However, the FMC did not respond

Contd..

It was clear to many that the NSEL crisis had happened purportedly

The stocks that were sold were absent & a payment failure was obvious

Brokers who enticed their clients to trade later went on record having inspected the warehouses & confirming adequacy of stocks

Where did the Stock vanished?

NSEL also instituted an internal enquiry & charge-sheeted errant officials

Shortly thereafter MD of NSEL Anjani Sinha was suspended

The government machinery swung into action

Implicated Jignesh Shah & all other directors on the board of NSEL

Action taken by NSEL & Govt.

On paper & legally it was clear that Jignesh Shah did not directly owe even a rupee of the 5,600 crore

It were the brokers who mis-sold the product on NSEL platform

Jignesh Shah was hounded & even arrested by Economic Offence Wing (EOW)

Later, EOW of Mumbai Police told the Bombay High Court that it was not able to find any money trail against Jignesh Shah

EOW gave Clean-Chit to JS