September 27, 2016 1:26:59 am
A SPECIAL CBI court has rejected the bail plea filed by Jignesh Shah, promoter of stock exchange MCX-SX, and has sent him to judicial custody till October 10.
Shah had been arrested last week by the CBI on charges of misrepresenting facts before Sebi – the market regulatory body – while seeking extension for its private stock exchange MCX-SX.
On Monday, Shah, who had been in CBI custody for the past five days, was produced before special Judge P S Tarare for an extension of remand. The CBI sought further custody of Shah stating that he is yet to reveal the source of funds in establishing MCX-SX.
The CBI also stated that Shah was being non-cooperative. The agency claimed that it wanted to investigate whether a renewal of the recognition for MCX-SX involved any “illegal gratification” to Sebi officials.
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Senior advocate Amit Desai, appearing for Shah, argued that the remand was not “legally sustainable” and opposed it.
“The omission to issue show-cause notice by Sebi officials or initiate action to cancel or withdraw the recognition granted to MCX-SX does not constitute an offence under section 420 (cheating),” Desai argued.
He added that administrative action could be taken on such an omission instead of filing a criminal case against Shah.
Desai also argued that junior officials of Sebi were being targeted in the case with allegations of collusion with Shah.
“The seniormost (in Sebi) who have given permission have been considered ‘honest’ while junior people who do not have funds for litigation, many of whom who have retired, are presumed to be linked with Shah,” Desai said.
He argued that there is “not a shred of evidence” to link Shah to the jewellery valued at over Rs 4 crore, allegedly seized from the property of Sebi officials named in the case.
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