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Fall of a titan

He was the rising star of a new India.  As a nation held its collective breath, ace innovator Jignesh Shah single-handedly set up India’s commodity exchange and then replicated it in other parts of the world to emerge as a poster boy. It was Make in India at its very best; marrying technology with chutzpah.  And then it happened.  

A Rs 5600 crore payment crisis ripped through his National Spot Exchange Ltd (NSEL), and Shah’s flagship company Forward Technologies India Ltd. FTIL was at the forefront of it. Shah asked for reasonable time to recover the booty; the government refused. 25 years ago, Harshad Mehta had similarly sought a chance to recover Rs 4300 crore in the much-romanticised stock scam. 

Was Shah another Mehta or was he an incorruptible genius who had fallen foul of mighty men in Indian politics? Ace investigative journalist Shantanu Guha Ray believes that Jignesh Shah rubbed India’s most powerful politicians the wrong way; politicians who wanted to see the rise of the NSE and the fall of NSEL. 

Had Shah not tripped, he could have been the Don of commodity exchanges, the world over. After all, in 10 years, even as people struggle to create one world-class product, he created ten. Yes, ten multi-assets financial markets in India, Singapore, Dubai, and Africa. These exclude other technology innovations. Each of Shah’s companies was an IP-based innovation meant to make the markets transparent and was far ahead of its time. They were No. 1 in India and No. 2 in the world. 

If Guha Ray is right, the powers-that-be annihilated Shah because he had out-staged the National Stock Exchange (NSE) in the marketplace. And the NSE had a godfather strutting the world of politics.  Ray’s book ‘The Target’ chronicles the fall from grace of India’s brilliant entrepreneur, looks into the NSEL payment crisis, and tries to explain what went wrong: when, where, why and by whom. The author asks the question that was uppermost in most Indians’ minds: whether we could have averted the crisis.

Ray argues that a few people manufactured the payment crisis to malign Jignesh Shah. He may have a point as the charges against Shah are till date unproven. Importantly, the agencies have tracked the entire money trail to 24 defaulting brokers and no money has been either traced to Jignesh Shah or his company FTIL. 

At a personal level, it is hard to believe that a Union minister would take the side of a private player, in this case, the NSE. Ray does not give a single reason, leave alone a compelling reason, for this. To believe that Shah was trapped because he dragged SEBI to the courts and stamped out NSE in the battleground is a trifle fanciful. Had evidence been forthcoming, it would have been a different proposition. 

For sure, Jignesh Shah has been brilliant. If he never had a crooked finger, that’s great; but the primary function of an Exchange is to guarantee settlements. If it can’t do so, it has to pay the price. The buck stops at the top. Promising to recover the boot can at best lessen the punishment, not reduce the gravity of the failure. 

It’s sad that one of India’s most brilliant entrepreneur fell by the wayside. Did he fall as the author suggests because he challenged the NSE, which had powerful political backers? Or did he fall because he was overly ambitious and aggressive? Was he a genius who was far ahead of his time or a man who tried far too many shortcuts and had paid the price? One day the courts will answer this fully. 

The good news is that Shah is not out. His new venture 63 Jupiter could be just what the doctor ordered.

The Target was released in Chennai at a function in Crossword where Shantanu Guha Ray was in conversation with Industrial Economist’s editor, S Viswanathan. And there, Guha Ray proved that he is an eloquent 


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