The commodities regulator claimed a 56-billion-rupee ($933-million) fraud had been committed.
MUMBAI (AFP) - The head of India s Financial Technologies, which owns a commodities exchange, was expected to appear in court over a multi-million-dollar fraud allegedly committed at the bourse, an officer said.
Financial Technologies chairman Jignesh Shah was arrested late Wednesday over the alleged fraud, news that sent the company s shares plummeting five percent on the Bombay Stock Exchange.
Shah has been under investigation since the National Spot Exchange (NSEL) in Mumbai, owned by his company, suddenly suspended trade in most of its commodities contracts at the end of July last year.
The commodities regulator claimed a 56-billion-rupee ($933-million) fraud had been committed after the exchange defaulted on dues to investors because it did not have enough collateral.
"Jignesh Shah has been arrested along with Shreekant Javalgekar on the basis of our investigations and the FIR (First Information Report) in the NSEL case," said Rajvardhan Sinha, chief of Mumbai police s economic offences wing.
"We will produce them in court today and ask for remand," Sinha told AFP.
Police are seeking remand so that they can question Shah in custody over the alleged fraud.
Javalgekar, reportedly one of Shah s trusted aides, headed a different bourse, the Multi Commodity Exchange (MCX), also owned by Financial Technologies, until his resignation last October.
Financial Technologies, which also sells trading software, confirmed Shah s arrest in a single line statement to the Bombay Stock Exchange on Thursday.
Shares of the company sank five percent to 276.70 rupees, while MCX shares were down 6.72 percent to 498.25 rupees.
Last year, shares of Financial Technologies fell as much as 88 percent while MCX tumbled 75 percent after news of the fraud surfaced.
Financial Technologies and Shah have previously denied knowledge of any fraudulent activity at NSEL.
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