LINKING Financial Technologies India Ltd (FTIL) chairman and MD Jignesh Shah to the National Spot Exchange Limited (NSEL) scam, the Enforcement Directorate has claimed that Rs 114 crore was remitted by defaulters of the beleaguered NSEL to two subsidiary companies of FTIL.
On Wednesday, while seeking Shah’s custody in a fresh case registered under the Prevention of Money Laundering Act (PMLA) , the central agency told court that transactions on the NSEL platform were ‘bogus and artificially exaggerated’.
In its remand application, accessed by The Indian Express, the ED has detailed how the subsidiaries and sister companies were allegedly created by Shah, including the Indian Bullion Market Association (IBMA) and National Bulk Handling Corp (NBHC) purposefully to route the proceeds of crime in a conscious effort to bring the illicit gains to the financial system and to project it as untainted. The ED has hailed Shah as the ‘brain’ behind multi-layered transactions allegedly as a front to launder money.
According to the remand application, IBMA , a step down subsidiary of FTIL received Rs 76 crore from the defaulters of NSEL during the period of 2011-13 in the garb of purchasing certain commodities.
Another transaction concerning IBMA states that IBMA allegedly received Rs 10 crore from Mohan Infracon Pvt Ltd, a group entity of Mohan India, defaulting members of NSEL. However, when Shrikant Javalgekar, president (Special Affairs), FTIL was quizzed regarding the transaction, he was not able to produce any evidence for them.
“Javalgekar stated that the ultimate beneficiary of the business activities of all the FTIL group companies was Shah as he was the majority shareholder of FTIL. Shah being in control of these entities can only throw light on the rationale behind these transactions,” the ED remand application read.
Dwelling on NBHC, the agency states that between July 29 to July 31, 2013 FTIL transferred Rs 117 crore to NBHC as ‘ loan’ . “In his statement , Devendra Agarwal ( chief financial officer, FTIL) told the ED that the transfer of the said amount are loan from FTIL to NBHC and payment from NBHC to NSEL (Rs 62.50 crore) is advance for procurement of commodities. However, the story by Agarwal of loan and repayment in the interval of two days does not cut much ice,” the agency observes.
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