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Financial Technologies India Ltd (FTIL) has called a board meeting tomorrow to discuss the arrest of its chief Jignesh Shah.
“I am really shocked at Shah’s arrest. The board meeting has been called tomorrow to take stock of the situation and decide about the future course of action,” FTIL director and former MCX chairman Venkat Chary told PTI.
FTIL Chairman and Group CEO Shah was arrested today by the economic offences wing of the Mumbai police for his alleged involvement in the Rs 5,600-crore payment crisis at group company National Spot Exchange (NSEL).
Shah’s FTIL owns NSEL, a spot commodities exchange that is under investigation by the police and regulators after struggling to settle outstanding contracts worth Rs 5,600 crore.
NSEL’s payment troubles began after it was ordered by the government in July last year to suspend spot trade in most of its contracts due to suspected violations.
The exchange could not settle the outstanding trades, sparking investigations by the police and regulators. FTIL blamed NSEL executives and the trading parties for the default.
There were 24 members who defaulted on payments to about 13,000 investors.
FTIL has been declared unfit by the Forward Markets Commission to run an exchange and ordered to pare its stake in Multi Commodity Exchange of India to 2 per cent from 26 per cent currently.
It will have to divest its entire stake to meet tighter commodity exchange ownership guidelines issued yesterday by the FMC.
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