ED likely to file money laundering case in MCX-SX licence grant case

Enforcement sleuths have sought remand copy and investigation details from the CBI, which is currently probing the case

The Enforcement Directorate (ED) is likely to register a money laundering case relating to investigation in the matter of recognition granted to the MSEI, formerly the MCX Stock Exchange.

Enforcement sleuths have sought remand copy and investigation details from the Central Bureau of Investigation (CBI), which is currently probing the case.

Confirming the development, an ED official said that the agency might take up the case under the provisions of the Prevention of Money Laundering Act (PMLA) after obtaining details of the case from the CBI.

It might also begin the process of identifying the 'proceeds of crime' allegedly created illegally and can seize them accordingly, the official added.

The CBI, in 2014, had registered a first information report against Financial Technologies India Ltd (FTIL), its founder Jignesh Shah, Multi Commodity Exchange, MCX-SX and four Securities and Exchange Board of India (Sebi) officials in connection with the grant of a licence to MCX-SX.

In September this year, Shah was arrested by CBI for connivance with MCX-SX to fraudulently allow renewal of its licence to conduct trades in currency derivatives in 2009-2010. He is now in judicial custody till October 10.

The CBI, in its remand copy, had pointed out the possibility of receiving illegal gratification by Sebi officials from Shah and the companies.

It further said that the MCX-SX’s application, dated April 7, 2010, seeking permission to operate in other segments was rejected by Sebi, but Sebi officials failed to take action for withdrawal of recognition of MCX-SX from operating in currency derivatives. “It is suspected that he (Shah) was hand-in-glove with Sebi officials to secure renewal of recognition of stock exchange to deal in currency derivatives," the CBI said.

According to the CBI, in 2009, while issuing buyback warrants, promoters of FTIL and MCX were trying to control economic interest in MCX-SX. It also alleged that Shah had suppressed material facts of buyback arrangements via warrant to Sebi.