Jignesh Shah refutes charges of insider trading by FTIL, MCX executives
Mumbai: Jignesh Shah, chairman emeritus of 63 Moons Technologies Ltd (formerly Financial Technologies India Ltd, or FTIL), on Friday denied any violation of insider trading norms by current or former executives of his company.
Shah defended the 16 current and former executives on Wednesday charged with insider trading in the stocks of FTIL and Multi Commodity Exchange Ltd (MCX), a firm promoted by FTIL, and said the trades were not based on unpublished price-sensitive information. He went on to add that he was being targeted.
Venkat Chary, chairman of 63 Moons, said that he will take up the issue of extending legal assistance to the people with the board of the firm.
MCX, on its part, informed BSE on Friday that the directions had been issued against individuals who are no longer associated with the company.
The Securities and Exchange Board of India (Sebi) on 2 August passed an interim order against former key managerial personnel of MCX and current and former executives of FTIL alleging that the individuals sold shares of the two companies from April 2012 to July 2013 on the basis of inside information.
According to the Sebi order, unpublished price-sensitive information was the implication of a show-cause notice issued by the department of consumer affairs on 27 April 2012, threatening suspension of trading at National Spot Exchange Ltd (NSEL), a subsidiary of FTIL. The Sebi order came four years after a payments crisis at NSEL that turned out to be a case of fraud.
Quoting an article published in The Economic Times on 2 October 2012, Shah argued that information about the show-cause notice was published in the paper and that it therefore it does not constitute unpublished price-sensitive information. On 3 October 2012, NSEL published a circular on its website informing its members about the notice from the department of consumer affairs.
Sebi defines unpublished price-sensitive information as information that impacts the price of a company and is not disclosed to shareholders through public platforms such as stock exchanges and the company website.
However, between April 2012 and July 2013, no disclosures regarding NSEL were made to bourses. The first disclosure on NSEL by FTIL to BSE was on 15 July 2013.
After the show-cause notice in 2012, on 31 July 2013, NSEL issued a late-night statement suspending all spot contracts. What seemed to be a mere case of following a government directive turned out to be a Rs5,574 crore payments fraud that led to losses for 13,000 investors.