NSEL scam: Court extends Amit Rathi's police custody till March 13

MUMBAI: A special court on Saturday extended the police custody of Amit Rathi, director of Anand Rathi Commodities Ltd (ARCL), until March 13, holding that he was an active director in the company, based on documents provided by Mumbai police.

Rathi’s counsel, senior advocate Amit Desai, argued against his extended remand on the ground that he was a non–executive director and therefore not actively involved in the company’s affairs. Rathi’s bail application will be heard on March 13. The court noted that Rathi was an authorised signatory to bank accounts of ARCL and participated in board meetings, based on documents provided by the Mumbai police’s Economic Offences Wing. The police searched the registered offices of ARCL, its holding company Anand Rathi Financial Services and Rathi’s residence on Thursday.

This was following the court’s order on Wednesday to the police to provide it with proof showing Rathi was more than a non-executive director of ARCL by March 7. Rathi, along with directors of Geofin Comtrade and India Infoline Commodities, was arrested last Tuesday for alleged misrepresentation, inducing investors to trade on the defunct spot bourse NSEL, “possible” nexus with FTIL, holding company of NSEL, and “rampant” client code modification.

On Rathi’s alleged nexus with FTIL, public prosecutor Avinash Ahwad said 26 companies of one Rawal group traded through ARCL and withdrew their funds in the months preceding the NSEL scam in July 2013. In one of these companies — Dynamatics — La-Fin, the promoter of FTIL, was a shareholder, he said. This finding needed more investigation. On the Rawal group transactions, Desai said the funds were withdrawn in April 2013, months before the scam broke and the total business done was `50-55 crore. He said many other investors could have withdrawn sums before the scam and at the relevant time when the scam broke out Rathi was out of the country.