Jignesh Shah’s efforts go beyond Financial Markets

Beginning with the creation of a third largest exchange in the world to set up projects involving corporate social responsibility, Jignesh Shah is a man who has left a mark with his vision for being ahead of the game. Multiple innovations mark Jignesh Shah’s journey as an entrepreneur.

Famous among his peers too often opt for unconventional choices, the man is one who may promote his laurels but would never rest on them. While most of us know his role in creating international exchanges, very few of us know about his initiatives in the social sector.

Gramin Suvidha Kendras is one such initiative between Multi Commodity Exchange and India Post. Spread over the four states of Maharashtra, Gujarat, Karnataka and Uttar Pradesh, the project aimed at providing information to the farmers on best practices in order to aid them in enhancing the value of their farming related activities. Mr. Shah himself was at the forefront of the project during its launch which aimed at making marginal farmer empowered.

The program had made farming economically sustainable by enabling informed decision making, helping farmers and generating market linkages thereby promoting inclusive growth and making farmers formidable stakeholders.

The initiative has earned FICCI Socio-Economic Development Foundation Award of 2009, NASSCOM Social Innovations Honours of 2010 and the 5^th BSE CSR awards. According to a study conducted by Tata Institute of Social Sciences on MCX and GraminSuvidha Kendra, 63 moons technologies limited generated more than a million jobs in the commodities ecosystem both directly and indirectly through this initiative.

Read more about Jignesh Shah's initiatives in promoting GSK (gram suvidhakendra)-a joint program by the Multi Commodity Exchange of India Ltd (MCX) and India Post.

In 2006, Jignesh Shah was awarded the U.S - India Businessman Award for his valuable contribution in integrating rural India with global markets.

For all his contributions which have been recognized on global platforms, Jignesh Shah today battles against those vested interests that have tried to devalue everything he has built. However, for a man of Mr. Shah’s caliber (he has built 10 exchanges), only one phrase applies – he is down, but not out.

For more information check 63 Moons.

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An Innovator halted by Vested intrest in his Tracks

It was in 1990 that a young man joined the Bombay Stock Exchange with dreams to make it big. He started off as an assistant manager on one of the biggest projects of his times, BOLT, and there was no turning back thereafter.

He traveled to 12 countries with a fellow colleague and learned the ropes of his trade. Four years later, he started his own software company that provided software solutions to capital markets.

He was the force behind ODIN which was a path-breaking front-end brokerage solution that today has a hold of over 80% of the world market. He was also the thrust behind the third-largest exchange in the world set up in a record time of 9 months. In the race of acquiring a license for this exchange, the man turned the tables every way possible and left its former employer- BSE.

He had created international exchanges in an era when no one knew what 'Make in India' was. It was the sight of his vision that Gramin Suvidha Kendra, an award-winning initiative that made farming sustainable for a marginal farmer, saw the light of day.

In 2005, he created an exchange, the course in this context, which has been a talking point for various reasons in the Indian ecosystem. For those of you who have still not guessed it-the man here is Jignesh Shah and the course is National Spot Exchange. The software company he started is known to us by the name of Financial Technologies India Limited and the colleague was Dewang Neralla.

Shah changed the way exchanges in India operated. Today, he is in the middle of fighting his way out of the much talked about NSEL issue. A large part of the industry stands by him when he is a lone voice against the executive overreach-the main issue in the NSEL-FTIL controversy.

The Innovator in him refuses to quit and he is confident of bouncing back with something new in his pipeline.   

For more information check 63 Moons.

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Battered by Political - Bureaucratic Nexus

The way the government and its agencies are handling the NSEL crisis, it appears as though the entire crisis is being dealt with an executive fiat rather a constructive approach to resolve the crisis and mete out justice to those who lost their money on the exchange platform in July 2013. Later in August, The Centre constituted a high-level committee chaired by Economic Affairs Secretary, ArvindMayaram, to look into the issue of NSEL failure and recommend measures to fill the gaps in the oversight of spot exchanges. The main issue was whether NSEL violated the Government exemptions for one-day forward trading and also the ban on all short sales.

The Mayaram Committee comprised secretaries of the MCA, DCA, the Department of Revenue, top representatives from the ED, the Directorate of Revenue Intelligence, SEBI, RBI, FMC, the Serious Fraud Investigation Office of the MCA, the Central Board of Direct Taxes and the Financial Stability and Development Council (FSDC) that is headed directly by the Union Finance Minister.

The Mayaram Committee seen as a ray of hope by NSEL and its parent company – 63 moons, to resolve the matter to some extent, however, played a biased role in giving its report to the PMO. The findings and recommendations of the report were solely targeted towards NSEL, completely ignoring the dubious role of the FMC, brokers, and defaulters. This clearly indicated that the committee was merely set up to dramatize the NSEL crisis to force 63 moons out of all exchange businesses. The Committee did not utter a word on (brokers & defaulters) who created and perpetrated the crisis or recommend any action to recover it from them. It referred to the public interest but did not recommend any measures towards recovering the money from the 24 defaulters who had admitted to the FMC in a public durbar and even agreed to pay back in a phased manner.

One critical fact that raises eyebrows is that normally high power committees like these are given three or more months to submit reports but the Mayaram Committee was told to do so within two weeks! It submitted its report on September 23, 2013, leaving a question mark as to how it could so quickly study the voluminous documents given to it by the FMC, NSEL, and other departments, undertake consultations with top officials from the various apex agencies, gather data, etc. The Committee recommended only one thing: action against NSEL, its directors, and promoters! This was despite the fact that it admitted that the NSEL crisis would not lead to any systemic impact.

The Committee submitted its report to the Finance Minister P. Chidambaram on the alleged irregularities at the NSEL. However, the report did not reveal key shortcomings and acts of omission and commission by the bureaucrats of DCA and FMC was claimed to be more of a cover up. Mr P Chidambaram had once said the NSEL crisis was a private dispute in an open market between two parties. It is difficult to understand that if that was the case, why was the Committee set up in the first place?

Instead of targeting NSEL and FTIL in all possible ways, the Mayaram Committee should have asked all the stakeholders of the crisis to come together and fix the responsibility as per their role and liability. This would have sent a strong signal that the government t is serious about solving the crisis and ensuring that the victims get their money.

Reference: http://www.nationalspotexchange.com/Truth_About_NSEL.htm

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Unfair Treatment at the Hands of Regulatory Agencies

While 63 moons and NSEL have been pursuing and satisfying commitments, within the framework available in the lawful sphere, to safeguard rescue and to attend to the interests of the affected constituencies, the behavior that was meted out to them by the various authorities has been pure unfair, in an excessive urgency, contravening and in contradiction of principles of justice that need to be applied to a firm operational towards disaster resolution.

The manner in which the accident at NSEL was handled is a cause of concern. The way it was addressed by various agencies, including the regulatory authorities raises far more important issues that could cause anxiety and disquiet for those people who believe in free markets and fair justice. A complete and comprehensive review of the whole episode what contributed to the crisis and how it was managed subsequently – brings into light the importance of balance and maturity in handling crisis such as this, which unfortunately is in severe shortcoming in this case. In democracies and free markets, crises are not uncommon. If the authorities go into excessive overdrive, demolishing everything that is remotely connected with the issue in the name of resolution of the crisis, the image, and ability of India to emerge as a major and mature economic power will come into serious doubt and dispute.

There is so much of misconception, misinformation, misreading, misunderstanding, and misinterpretation around the whole crisis that it has made it into a sordid drama where players who should have taken the responsibility of finding a solution to the crisis went beyond their brief, leading to a complex situation arising.

The NSEL accident is not something that the world has not known in the past or that has never taken place. The context of the crisis is also not something so unusual. The question that only comes to mind is how and why there was so much hurry on destroying a vast ecosystem that has great potential to grow and contribute to India’s progress, which was carefully built over long years, in the name of solving a crisis just to fulfill the demands of a few high net-worth trading clients who themselves are also to be blamed, in the first place, for the crisis to happen?

The way it was dealt with raises more questions than answers. Here are a few that are quite puzzling and perplexing.

Reference: http://www.nationalspotexchange.com/Truth_About_NSEL.htm

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Investigative Agencies Go After The Defaulters In Nsel Case

Investigative Agencies have gone after the Defaulters in the National Spot Exchange Ltd (NSEL) case. The Economic Offences Wing (EOW) of the Mumbai Police has attached assets worth Rs. 5,000 crore of defaulters.  

“We have already secured recoveries worth Rs.1, 233.02 crores by way of decrees on admission against five defaulters and through injunctions from a total of 18 defaulters with outstanding of Rs.4, 515.93 crores. The EOW has attached assets worth around Rs.5,000 crore of defaulting trading members,” NSEL chief executive Prakash Chaturvedi said in a letter to shareholders. The NSEL case was unveiled when the exchange was unable to pay its traders in commodity pair’s contracts post-July 2013. 

In March, authorities issued public notices to sell properties of three defaulters —Swastik Overseas Corporation, Ferrochrome of Metkore Alloys & Industries, and Red Chilly & Black Pepper, part of Shree Radhey Trading. The Enforcement Directorate also attached assets worth around Rs.800 crore of defaulting traders, Chaturvedi added.Knight Frank has been assigned the responsibility of working as consultant by the Sessions court, to help bring prospective buyers for the sale of properties of Mohan India Group; one of the biggest defaulters. 

This is perfect for the approximately 11,000 NSEL traders who, according to the Sessions court, would get their dues paid once the liquidation of defaulters’ properties is expedited. Knight Frank’s global reach will allow individual and corporate clients to participate in high bids.  NSEL is being forced to merge with parent company 63 moons, of which Jignesh Shah is the promoter. However, it has claimed that two defaulters out of 24 have almost cleared their dues of Rs. 195.75 crore. It was also claimed that Rs. 542.99 crore has been disbursed, including a loan from FTIL. 

The Bombay High Court had set up a three-member committee to ensure smooth recovery and payback when NSEL was settling e-series contracts up to 98.48% by disbursing Rs. 298.52 crore to around 40000 E-series unit holders. NSEL has also revealed that it recovered Rs. 28.33 crore and just needs a nod from the high court committee to pay back to the legitimate trading clients.

Reference: http://www.nselrecoverygroup.com/defaulters/defaulters.html

For more information check 63 Moons.

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