There was a time when Jignesh Shah was a rising star in the commodities and futures industry. Today this isn’t the case.
He has lost control over his financial empire. The number of nominees on the MCX board is down to one and institutional shareholders have all but taken over the MCX-SX board. At one point, Jignesh Shah was an important player in Bahrain. As the Chairman of BFX and BFX Clearing and Depository Corporation (BCDC) he received the special attention of Prince Khalifa Bin Salman Al Khalifa in Feb 2011. Touted as the first exchange platform in West Asia, BFX offered equities, commodities, bonds, currencies, Islamic financial instruments and Sharia-compliant products. But three years later, the BFX website displays just three board of Directors. There is no mention of Jignesh Shah on the website.
FTIL had to sell off its 100% stake in Singapore Mercantile Exchange, launched with much fanfare three years ago, to ICE Singapore Holdings, owned by Atlanta-based ICE group, for $150 million USD. FTIL’s sudden exit from SMX and SMX Clearing Corporation was allegedly masterminded by Monetary Authority of Singapore (MAS), the financial regulator in Singapore. MAS reportedly has a way of telling exchange owners to do things their way or lose their licenses. FTIL Group’s entire ecosystem is in a state of flux, but nothing can be worse than Dubai Gold Commodity Exchange a 50:50 joint ventures between Dubai Multi Commodities Centre DMCC and DGCX. DGCX prospered with the support of Indian bullion and diamond merchants in the Emirates and became the first bourse to offer dollar-rupee forex trading. FTIL held two of the five nominated seats on the board —Shah (Vice-chairman), Joseph Massey (Director).
Though the DGCX website still mentions Jignesh Shah as its Vice Chairman – this is as far as the love affair goes. Today as per the DGCX website the four Directors on its Board include Ahmed Bin Sulayem as Chairman, Jignesh Shah, Vice Chairman, Abdul Wahid Al Ulama, who represents the Dubai Financial Services Authority (DFSA), Commercial Bank of Dubai and International Chamber of Commerce (ICC) as an Independent Director and Gautam Sashittal – an Indian emigrant as non-executive member on the board of directors of DGCX since Jan 2010. With a background in accounting as well as in the oil and gas industry, Gautam Sashittal - a former CFO of Dubai Gold and Commodities Exchange (DGCX) is now CEO of DMCC, a Dubai government Authority, responsible for establishing Dubai as a global gateway for commodity trading by providing the appropriate financial infrastructure and services.
Botswana-based $100 million Bourse Africa chaired by former President of Botswana, Festus Mogae, is like a dormant volcano- no one knows when it will burst, if at all. It was targeted to go live in 2009. But five years down the line — the Exchange is nowhere close to meeting the needs of the African people.
Prime Minister of Mauritius, Dr. Navinchandra Ramgoolam, described the Global Board of Trade as – “a small step for GBOT but a big stride for the Mauritian economy” at the time of its official launch in Oct 2010. Today GBOT is allegedly the shame of Mauritius - embroiled in several controversies. Sudeep Rawool, a former senior manager in trading and surveillance at GBOT has filed a case in the Mauritius Supreme Court alleging that 85% of the trades conducted at the exchange are fictitious and the bourse routinely violates local money laundering laws. Jignesh Shah is the vice chairman of GBOT - a 100% owned entity of FT Group regulated by Financial Services Commission (FSC) of Mauritius.
Back in India the Serious Frauds Investigation Office (SFIO) is investigating the affairs of NBHC. FTIL which had to sell off a 6 percent stake in the IEX to bring down its stake to 25% — as required by the Central Electricity Regulatory Commission. There was a time when NSEL was contributing as much as 50% of the FT revenues. A probe by the Registrar of Companies (RoC) revealed that the NSEL board had met only 46 times. At none of these meetings was the business model of the exchange discussed. There was a rampant practice to cheat investors and submit false records to the RoC. Even forged minutes were prepared of fictitious Board Meetings which never took place.
What did Jignesh Shah gain in the process? Does the remuneration of Rs. 18.02 crore - around 2.4% of Financial Technologies consolidated revenues and 7.9% of Net Profits in FY 13 or Rs. 15.5 crore – i.e. 3% of FT’s revenues and 23% of net profits in 2012 – justify the loss? Is this the price paid for success?