New Delhi: In mounting troubles for Jignesh Shah-led Financial Technologies (India) Ltd (FTIL), the government has directed the Serious Fraud Investigation Office (SFIO) to probe the company and its 18 associates with respect to alleged irregularities in the nearly Rs5,600-crore scam at National Spot Exchange Ltd (NSEL).
Besides, the SFIO would look into the role of 20 defaulting entities as well as their nexus with brokers who were responsible for the payment crisis at the now-defunct NSEL. Following the scam at NSEL, its parent FTIL and various other entities have come under the scanner of multiple investigation agencies, including the Economic Offences Wing (EOW), Mumbai Police and Enforcement Directorate (ED).
The Corporate Affairs Ministry has ordered the SFIO probe after further facts came to the notice about the entities’ alleged involvement in NSEL scam, people familiar with the matter said. The investigation would be into the affairs of NSEL, FTIL, their 18 subsidiaries and associate companies as well as the 20 defaulting entities and their nexus with the brokers.
SFIO, which is a multi-disciplinary organisation that probes serious financial frauds, has been asked to submit its investigation report in six months time.
No immediate comments could be obtained from FTIL, whose name now has been changed to 63 Moons Technologies Ltd.
On 12 February, the ministry had directed the merger of scam-hit NSEL with FTIL, in a first-ever order to merge the two private companies. In the wake of Rs5,600-crore payment crisis at NSEL, the ministry had sought merger of the bourse with FTIL as well as replacement of existing FTIL management. While the merger order has been challenged at the Bombay high court, the matter regarding replacing the current FTIL management is before the National Company Law Tribunal (NCLT).
The payment crisis at NSEL came to light in late 2013. Government has been monitoring the action taken by investigating and enforcement agencies for violations of law, criminal offences and default in payments to investors on NSEL platform.
Investigations and other enforcement measures are being taken by the EOW, ED, Securities and Exchange Board of India (Sebi) and Financial Intelligence Unit–India (FIU-IND).