The Economic Offences Wing (EOW) of the Mumbai Police on Monday launched a massive search operation at various locations, including the residence and offices of Jignesh Shah (pictured), promoter of Financial Technologies (FTIL), the promoter firm of National Spot Exchange (NSEL) which is now embroiled in a default-related scandal.
The EOW conducted searches at the premises of Financial Technologies (where the NSEL office is also located) as well as of 24 borrowers who collectively owe over Rs 5,500 crore to NSEL. "Searches are going to be conducted at 184 locations across the country," confirmed an EOW official.
The EOW also registered a first information report (FIR) against NSEL's promoters, directors and the 24 defaulting members on multiple charges that include cheating, forgery, breach of trust and misappropriation of funds.
NSEL has drawn a plan to pay out funds to its 148 trading members representing the dues of over 13,000 investors over the next six months. But it has not been able to collect part payments from 24 borrowers.
The troubled commodity exchange has been facing public ire that led to the finance and corporate affairs ministries, the CBI and the income tax department getting involved in unearthing irregularities at NSEL.
Meanwhile, NSEL sait it, too, filed a complaint with the EOW. "We understand that investors have also filed several complaints. We welcome any action by the government authorities. It is to help recover the money from the borrowers. NSEL and Financial Technologies Group will fully cooperate with the government authorities in these investigations and are open to any scrutiny to bring the actual culprits to book," said NSEL in a statement.
Elsewhere, the National Stock Exchange or NSE said on Monday it will exclude Financial Technologies from the future and options or F&O segment from November 1. All existing contracts of the company with expiry dates October 31, November 28 and December 26 shall expire on October 31, the NSE said.
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