EOW eyes sweeping powers to tackle Jignesh Shah: Srcs

As investigations gather steam and the details get murkier, the Economic Offences Wing (EOW) of Mumbai Police is contemplating flexing muscles against Jignesh Shah, the Chairman and CEO of the Financial Technologies Group.

Sources have confirmed that EOW is currently considering the invocation of the Maharashtra Protection of Interest of Depositors Act (MPID Act). MPID was enacted in 1999 with the aim of the tackling financial institutions that are believed to be acting in a calculated, pre-determined manner designed to hurt the interests of depositors or investors.

Upon invocation, this Act will allow the EOW to attach or seize properties and assets of not merely National Spot Exchange Limited (NSEL) but also those of promoter Jignesh Shah. Moreover, the EOW would also have the powers to the conduct auction and realise the money for satisfying payments defaulted upon by the establishment in question.

The act also provides for penal action against the promoters, management or employees, if found guilty of fraudulent default. And for a jail term of up to six years and a fine of up to rupees one lakh.

If invoked, the EOW would require the nod of only a designated MPID court, as against the magistrate court's approval, to proceed with seizures and auctions.

Importantly, such action being contemplated comes close on the heels of high profile arrests in the form of Amit Mukherjee, former VP of Business Development and Jai Bahukhandi, former VP of warehousing. The EOW is also investigating possible kickbacks to Anjani Sinha, the former MD. He had failed to turn up for questioning despite summons issued by EOW. 

Sources had also confirmed that there is ample evidence of fudging of accounts.

EOW sources also questioned the role played by the Forward Markets Commission (FMC) expressing displeasure at, allegedly not receiving sufficient cooperation.

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