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Court rejects bail petitions of Gaud, Daga, Paul

A Kolkata court rejected on Thursday the bail petition of former vice-president of Calcutta Stock Exchange K K Daga, arrested in connection with the Rs 120 crore (Rs 1.2 billion) scam at the bourse last year, and remanded him to police custody till October 31.

The court also rejected bail prayers of former CEO and managing director of Stock Holding Corporation of India B V Gaud and senior vice president of Hinduja-controlled IndusInd Bank S N Paul and remanded them to judicial custody till November 7.

Earlier, public prosecutor argued that granting bail to the accused would be detrimental to the investigation which was at 'crossroad' after commencing on September 9 on a complaint filed by CSE.

He also said the bails could not be granted as some of the accused, including alleged main conspirator Dinesh Kumar Singhania, was still absconding.

Daga was arrested on October 17 for his alleged role in suppressing information provided by IndusInd Bank related with dishonour of cheques issued by some of the CSE brokers against their margin payments in March 2001. Police claimed that had Daga not suppressed the information, the extent of payment crisis would have been much lower.

Daga's counsel, however, denied the allegation and claimed that he had passed the information to the then president Kamal Parekh. He also argued that it was the responsibility of surveillance department to keep a tab on information related with dishonour of cheques.

Gaud was charged with offering 'extra' facilities to one of the prime accused in the scam, including Harish Chander Biyani, under SHCIL's 'sell-n-cash' scheme and was arrested on October 10.

Gaud, who retired in June this year, was the head of the organisation when the scam took place.

He had reportedly denied the allegation saying the particular scheme was looked after by SHCIL's senior vice-president K S Murthy and after this deposition Murthy was interrogated by the police for the last two days.

Meanwhile, the Kolkata police had asked IndusInd management to send its Mumbai-based senior vice-president (investment banking) V B Raju for interrogation. The bank had, however, informed that Raju was on leave.

A total of 11 persons - six brokers, an employee of a firm owned by prime accused Dinesh Singhania and managing director of SREI Securities Dinesh Jain - had so far been arrested in the scam while a large number of those named in the complaint were still at large.

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