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Seth, Agarwal's jail term further extended

A Mumbai court on Thursday remanded to police custody, promoter of Gilt-Edge Securities Ketan Seth and Home Trade Limited employee Kanan Mewavala till June 12.

Additional Metropolitan Magistrate S A Shelar passed the order against the two for their alleged involvement in Rs 54 million Raghuvanshi Co-operative Bank gilt scam.

Seth was arrested by the Central Bureau of Investigation on May 14, and was in CBI remand till May 27, for his involvement in the defalcation of Rs 928 million.

In another development, Home Trade CEO Sanjay Agarwal, was remanded to judicial custody till June 20 by a special court in Mumbai.

CBI urged for his custody for a further period of 14 days but the court remanded him to judicial custody till June 20. Agarwal is also facing criminal charges under section 406, 409, 468 and 34 of Indian Penal Code in the alleged Rs 1.5 billion government securities scam.

On a plea by the Crime Investigation Department, Special Judge S G Deshmukh also allowed the cops to take Agarwal to Nagpur for his production in a court there on Friday.

Police submitted before the court that Raghuvanshi Bank had purchased government securities worth Rs 54 million through Home Trade. Sheth was its director and played a key role in siphoning off public funds from the bank. Other directors of Home Trade are allegedly absconding and cash has yet to be recovered.

Sheth's counsel Amit Desai and Vijay Garg submitted that his client had resigned from the board of directors of Home Trade in May 2001 and was not a director of the company at the relevant time of the alleged offence. Hence he had not cheated the bank.

Urging for Sheth's bail, defence lawyers argued that his custody was not justified because police had interrogated him at length.

The court refused to grant bail to Sheth on the ground that this was a serious matter and public money was involved.

Police said Raghuvanshi Bank was only possessing contract note of the purchase of these government securities. It was not in physical possession of these securities.

It transpired during audit that the bank had made nine transactions with Home Trade regarding purchase of government securities but never got their delivery, the court was informed.

As regards Mewawala, police said that she had approached Raghuvanshi bank and lured its directors to invest bank's money in government securities through Home Trade. Police alleged that Mewawala was fully aware that this money was diverted in other projects of Home Trade.

Police further alleged that Mewawala prepared contract notes and signed them without holding any authority. She had exceeded her powers, police said.

UNI and PTI

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