Court Ex­tends Jig­nesh’s Po­lice Cus­tody till Mon

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A ses­sions court in Mum­bai ex­tended the po­lice cus­tody of Jig­nesh Shah and Shree­kant Javal­gekar, both ar­rested for their al­leged com­plic­ity in the .` 5,600-crore NSEL scam un­til May 19. Shah, pro­moter of Fi­nan­cial Tech­nolo­gies (FT), which has a 99.9% stake in NSEL, and Javal­gekar, for­mer group fi­nance di­rec­tor at FT, were ar­rested by the Mum­bai po­lice on May 7 and re­manded to po­lice cus­tody on May 8. The court had di­rected the po­lice to present Shah and Jav­agekar be­fore it on May 15. Lawyers for Shah and Javal­gekar, Ma­hesh Jethmalani and Uday U Lalit, re­spec­tively, ar­gued against fur­ther po­lice cus­tody for their clients on the ground that the po­lice had found noth­ing to link them to the scam af­ter seven days. An ac­cused in po­lice cus­tody can­not ap­ply for bail. But once the ac­cused is re­manded to ju­di­cial cus­tody, he or she can ap­ply for bail. How­ever, the pub­lic pros­e­cu­tor ar­gued that the in­ves­ti­ga­tors had stum­bled upon a trans­ac­tion that could pro­vide vi­tal clues into the al­leged role of Shah and Javal­gekar in the scam, and thus fur­ther cus­to­dial in­ter­ro­ga­tion was needed. The trans­ac­tion per­tains to a sub­sidiary of NSEL, In­dian Bul­lion Mar­kets As­so­ci­a­tion, hav­ing run trades in maize and bar­ley in 2010 on com­mod­ity bourse MCX, an FT-pro­moted en­tity, and hav­ing suf­fered a loss of .` 1.5 crore for al­leged mar­ket mak­ing. MCX, at the in­stance of FT, rec­om­pensed IBMA for the trades, which the po­lice claimed pointed to links among NSEL, IBMA and FT. This, the po­lice said, was only the “tip of the ice­berg”, and Shah and Javal­gekar could not claim ig­no­rance of what was go­ing on at NSEL. How­ever, lawyers for the ac­cused con­tended that the mere ex­is­tence of emails be­tween An­jani Sinha, for­mer MD of NSEL, and FT on the IBMA trades did not im­ply com­plic­ity of their clients. They said tax had been paid on the .` 1.5crore com­pen­sa­tion to IBMA. Fur­ther, Ja- val­gekar’s coun­sel held that he had no role to play in MCX when the said trans­ac­tions took place, hav­ing been ap­pointed MD of MCX in 2012. Jethmalani said Sinha and a few oth­ers ac­cused in the scam at the rel­e­vant time were its mas­ter­minds and that the board of NSEL, com­pris­ing Shah and Javal­gekar, had no role to play in it. “A Chi­nese Wall ex­isted be­tween the man­age­ment led by Sinha and the NSEL board,” he said.

He said the po­lice had ar­rested Shah and Javal­gekar af­ter Sinha re­canted in a sec­ond af­fi­davit last month and laid the blame squarely on Shah. “How can the po­lice act on the sec­ond af­fi­davit of the prime ac­cused six months af­ter he swore on oath and sub­mit­ted be­fore the En­force­ment Direc­torate that he was solely re­spon­si­ble for the scam,” asked Jethmalani. To this the pub­lic pros­e­cu­tor replied that Shah and Javal­gekar were named in the po­lice FIR of Septem­ber 30 last year and Sinha’s re­cant­ing had no role to play in their ar­rest.

Pub­lic pros­e­cu­tor says in­ves­ti­ga­tors have stum­bled upon a trans­ac­tion that could pro­vide vi­tal clues into the al­leged role of Shah & Javal­gekar in the scam

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