The Central Bureau of Investigation on Tuesday arrested Financial Technology India Limited founder Jignesh Shah in connection with a case related to using fraudulent means to procure an extension for the Metropolitan Stock Exchange Of India to continue operating as a private commodity exchange. Shah is accused of cheating and hiding information from the Securities and Exchange Board of India to have the licence for MSEI – formerly known as MCX-SX – renewed, according to The Indian Express.

The CBI also conducted raids in nine locations in Mumbai, including at Shah's home and the offices of FTIL and MCX, as well as those of senior Sebi officials, including Executive Director Murali Dhar Rao, Deputy General Managar Rajesh Dangeti, Assistant General Manager Vishakha More, and former Sebi executive director JN Gupta. The agency said it had seized "incriminating documents" from them, including ones on transfer of shares by private companies, purchase of assets and FDR, for further investigation.

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According to the CBI, MCX had "dishonestly entered into a buyback arrangement with some financial institutions" and had deliberately hidden this information while applying for a licence extension. In 2010, Sebi had allegedly rejected its request to operate as a private stock exchange for trading in other segments, but the market regulator renewed its registration even though it did not comply with Sebi norms. A case has been registered against FTIL and the four Sebi officials for allegedly violating ruled to allow MCX to trade in currency derivatives.

This is the third time Shah has been arrested by various investigating agencies. He was taken into custody by the Economic Offences Wing of Mumbai in May 2014 in connection with the Rs-5,574 crore National Spot Exchange Ltd scam and was granted bail in the case in August 2016.