13 July,2016 12:20 PM IST | | mid-day online correspondent
The name Jignesh Shah has been trending on social media ever since he was arrested in connection with the NSEL scam. So, who exactly is Jignesh Shah? And what is the NSEL scam all about? We tell you
The name Jignesh Shah has been trending on social media ever since he was arrested in connection with the NSEL scam. So, who exactly is Jignesh Shah? And what is the NSEL scam all about? We tell you.
Jignesh Shah
Jignesh Shah: He is the founder of Financial Technologies India (FTIL). He came under the scanner of EOW and other agencies in 2013 when National Spot Exchange Limited (NSEL), part of the FTIL, faced a payment crisis as nearly 18,000 of its investors allegedly lost millions of rupees. On Tuesday, the Mumbai team of the Enforcement Directorate (ED) arrested Shah on charges of money laundering in the multi-crore NSEL scam. He was earlier arrested in 2004 as well, in connection with the scam.
About the scam: The scam first came to light in July 2013 after NSEL failed to pay its 13,000 investors in commodity pair contract, following which they lost nearly Rs 5,600 crore.
Thousands of investors were lured into trading on the NSEL with the promise of an assured return of anywhere between 15% and 18% per annum. NSEL facilitated commodity producers to find buyers for their products. Operating smoothly in the initial stages, payment cycles were changed by the promoters.
The buying and the selling of commodities like steel, paddy, sugar, ferrochrome, etc., was conducted only on paper. The promoters used the money to buy properties across India. Investors then stopped getting returns.
