From Rags to Riches to Behind Bars – Financial Technologies' Chairman Jignesh Shah Arrested

The Chairman of Financial Technologies (FT), one of India’s largest financial technologies firms, has been arrested in Mumbai in connection with the $930 million scam at the NSEL. Indian media reported today that Mumbai’s Economic Offences Wing arrested Mr. Shah and the former CEO of the MCX Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, Shreekant Javalgekar. The arrest comes on the back of on-going investigations by the country's regulators and police which saw Mr. Shah step down as an executive of the MCX’s board in November last year.

Financial trading venues promoted by Financial Technologies were a reflection of the new ‘Asian’ world order with the likes of China and India taking heed of economic glory.

However, in an undesirable state of events, miscalculations have caught up with Jignesh Shah, as Mumbai’s specialist division that deals with financial crime investigates the dysfunction of the spot exchange, promoted by FT.

Financial Technologies, a listed firm on the BSE and NSE exchanges, was established in 1990 by Shah. He gained his experience in the e-trading arena during a project at the Bombay Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term, however due to internal arrangements the project came to a halt.

The NSEL was under scrutiny after the regulator found irregularities in its accounting and it was suspended last year. The dilemma placed a number of investors and brokerage firms in difficulty with over nine hundred million dollars unaccounted for.

In its 2013 annual filings, FT reported that it had earned income of $574 million from its NSEL operation, which constitutes 5% of the overall group income. The FT group of companies have been behind significant projects in the financial trading sector, including the MCX exchange in India, the county’s most liquid commodities exchange. In addition, the UAE’s commodity exchange which was the world’s first exchange to launch an offshore FX derivatives contract trading the rupee, along with several other exchanges in Bahrain, Botswana and Mauritius.

The story of an average engineering graduate from Mumbai, who climbed the ladder to be recognized on Forbes India as the 87th wealthiest person in India in 2010, to the current scenario, highlights the speed at which change occurs in financial markets. However, some market professionals believe Jignesh Shah has been singled out by the wider market for his timely success in a bureaucratic market that is not so eager to accept change.

Financial Technologies' share price has slumped on the back of the investigations into the exchanges the firm promotes, and is currently trading at 290 Indian rupees on the NSE. During its economic peak in 2008, the share price traded above 2,300 rupees with a market capitalization of $2 billion.