Shah remanded to custody

MUMBAI, June 28: Additional Chief Metropolitan Magistrate Justice S R Dhumal today remanded Ruby Group owner Bharat M Shah to police custod...

MUMBAI, June 28: Additional Chief Metropolitan Magistrate Justice S R Dhumal today remanded Ruby Group owner Bharat M Shah to police custody till July 1, in connection with the Oriental Bank of Commerce OBC case.

The Central Bureau of Investigation CBI, which arrested Bharat Shah here yesterday, contended that he had hatched a criminal conspiracy in collusion with some bank officials during 1995-96 which caused a loss of Rs six crore to the OBC and corresponding gain for themselves.

The CBI had registered a case in May 1995 following a complaint by the bank8217;s chief vigilance officer. It was alleged that three certificates of deposits CD for a total amount of Rs 3.29 crore maturing on July 31, 1995, were issued by OBC in the name of Kikabhai Premchand Trust, whose chairman was Bharat Shah8217;s father, M C Shah.

The CDs were falsely shown as pre-maturely closed on May 30, 1995 and part of the proceeds to the tune of Rs 3.85 crore were dishonestly and fradulently credited to the account of Adrik traders, a Ruby Group Company, which lead to wrongful gain for Bharat Shah, the CBI contended.

The original CDs, undischarged by the trust, were claimed to be in the possession of the bank. However, there was no written mandate from the said trust for such pre-mature cancellation.

8220;The complicity of the trustees also cannot be ruled out as they never made any correspondence asking the bank for the CD receipts,8221; the CBI said.The CBI further contended that the bank officials had unauthorisedly issued three more cumulative deposit receipts CDRs for a sum of Rs 1.05 crore in favour of the said trust despite insufficient funds in the account.

In pursuance of a criminal conspiracy, demand loans aggregating to Rs 90 lakh was given to the trust without any request letter or loan documents and the loans were transferred into the account of Adrik Traders, CBI submitted.

Story continues below this ad

CBI had conducted searches in the office and residential premises of Bharat Shah and bank officials, P Hosati and P Balakrishnan and seized incriminating documents from the office premises of Adrik Traders. Bharat Shah was the main beneficiary of the huge funds which fradulently got credited into the account of Adrik Traders operated by him, CBI alleged.