SFIO To Join The List Of Investigators Probing Financial Technologies

Trouble mounts for Jignesh Shah-led Financial Technologies Ltd., 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 Rs 5,600-crore scam at NSEL.

Besides, the Serious Fraud Investigation Office (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 National Spot Exchange Ltd (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. The Corporate Affairs Ministry has ordered the SFIO probe after further facts came to light about the entities' alleged involvement in the NSEL scam, sources 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 has now been changed to 63 Moons Technologies Ltd.

On February 12, 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 Rs 5,600-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).