The steep fall of Jignesh Shah

Had to give up his MCX cash cow, exchange tech income is threatened and his personal assets have been attached

Jignesh Shah, once rubbing shoulders with the heads of the world's largest exchanges and aiming to himself run the biggest among these and the related systems, has seen the earth shift rapidly below his feet. Almost all that he'd earned has evaporated, following the failure a year before of one of his unregulated bourses, National Spot Exchange (NSEL). And, then, there's his reputation. His net worth is eroding. The share price of Financial Technologies (FTIL), his flagship venture, has improved in recent weeks but that is of little consolation. As on today, his holding in FTIL is worth Rs 728 crore - it was Rs 1,139 crore on July 31 last year, when NSEL, its subsidiary, suspended trading and the whole fiasco came out in the open. However, most of this worth is notional, as his assets, including the FTIL holding, has been attached by the economic offences wing (EOW) of the Mumbai police. Soon after the crisis came out in the open, the stock price of FTIL crashed to Rs 102, earlier seen a decade earlier. When the company started selling its stake in Multi Commodity Exchange (MCX), the share price improved; it is now Rs 346. FTIL is now selling all its exchanges. An exit from MCX is on the verge of completion and Indian Energy Exchange could be next. Abroad, it sold Singapore Mercantile Exchange for Rs 931 crore; the money was used to repay its debt to banks. Its stake in Dubai Gold and Commodities Exchange (DGCX) could also fetch a good valuation but it is owned by a Dubai government venture and all depends upon how or whether the latter purchases that stake or allows FTIL to divest - there is no valuation benchmark. "Without prejudice to the legal rights and remedies, FTIL would like to exit from exchange businesses," said an FTIL spokesperson. Shah was arrested on May 7 last year; he is to soon come out on bail. He will have to face court cases, respond to the chargesheet that the EOW will file and also have to face NSEL investors' wrath. But Shah hasn't lost it all. ATOM, a technology for the future, is in his fold. ODIN is still a preferred software for brokers and tickers, with potential. For now, though, all this is long-term.