Magistrate Court Accepts C-Summary Report That Rules Out Rs. 900-Cr MCX Fraud Alleged By PWC

A Metropolitan Magistrate Court in Andheri has accepted a C-summary report filed by the investigating officer in a case which emanated out of a complaint alleging a Rs. 900-crore scam in Multi Commodity Exchange (MCX).

One of the shareholders in MCX, Ketan Anil Shah, had filed a complaint under Sections 409, 465, 466, 467, 468, 471, 420 and 120B of Indian Penal Code against directors of the company.

Chief metropolitan magistrate JS Mali passed the order on Wednesday, while hearing a protest petition filed by Shah.

The complaint relates to “misappropriation, mismanagement, inducement, forgery, cheating and fraud committed by the Board of Directors and other officials, including auditor of Multi Commodity Exchange (MCX)”.

MCX is an independent commodity exchange based out of Mumbai. It is India’s largest commodity futures exchange.

The complainant essentially alleged that shareholders’ funds were siphoned off with collusion between directors and office bearers of both MCX and Financial Technologies India Ltd (FTIL).

FTIL, which is now known as 63 Moons Technologies Ltd, was launched by Jignesh Shah, who is at the centre of the NSEL-FTIL scam, and is alleged by the complainant to be “the mastermind” behind the MCX fraud as well.

According to the complaint, Pricewater House Cooper Pvt. Ltd. conducted a detailed forensic audit under the direction of forward market commission into the alleged irregularities in MCX.

The audit report stated that there were “various instances of conspiracy to commit mis-appropriation of funds by raising bogus and inflated invoices, donation to fictitious trusts, causing systematic economic fraud by various officials and directors from the period 2003 to April 2014”.

The report revealed that a staggering amount of money was given to companies that do not even exist.

Jignesh Shah’s FTIL originally held 100 per cent stake in MCX, but the stake was sold to National Bulk Warehousing Corporation.

The complainant alleged that none of these aspects were considered by the investigating officer, instead he filed a C-summary report declaring no irregularity in MCX.

CMM JS Mali relied on the statement of the author of the PWC audit report wherein he stated that his report was based on hearsay, the C-summary report filed by the investigating officer and a clean chit given by the committee set up by MCX itself following PWC’s report, and dismissed the protest petition filed by the complainant and accepted the C-summary report.