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Goud, Paul in police custody for a week in CSE case

BS Bureau in Kolkata

The chief metropolitan magistrate Kolkata, today remanded B Virupaksha Goud, former managing director and CEO of Stock Holding Corporation of India Ltd, and S N Paul, senior vice-president of IndusInd Bank, to police custody for a week.

The Kolkata Police, which arrested the two for their alleged involvement in the Rs 120 crore (Rs 1.2 billion) scam that rocked the Calcutta Stock Exchange in March 2001, produced them before CMM on Thursday. With these, number of persons arrested in the case increased to 10.

Deputy commissioner (detective department-I) Soumen Mitra said documents, hand-written notes and verbal communication of Goud unearthed by the police prima facie established that he, along with the Singhania, Biyani and Poddar trio, was part of the payment crisis that brought the exchange to its knees.

The charges against Paul included withholding f information about bouncing of cheques, issued by Dinesh Singhania and misuse of his office, Mitra said. He also added that all the defaulting brokers had accounts with the Hindujas-promoted bank and Paul extended legal steps to facilitate the scam.

Terming the arrest of Paul as unjustified, IndusInd Bank said the bank itself was an aggrieved party in the CSE payment crisis and it was yet to recover funds of Rs 25 crore (Rs 250 million). In a press note, the bank said it would like to reiterate that its own investigations into the matter proved that there was no evidence of collusion between IndusInd Bank and CSE brokers or officials.

"The bank has enough documentary evidence on file to show that there was no complicity, of either the bank or its officials, via-a-vis the CSE brokers and officials in this matter," the note said.

Meanwhile, the police today interrogated Tapas Datta, former executive director of CSE and S L Saraf, a prominent Lyons' Range operator. Saraf was asked to appear at Lalbazar-city police headquarters on Friday with certain documents to corroborate his claim that he was no way involved with the scam.

Meanwhile, IndusInd Bank today said that the arrest of its senior vice-president SN Paul is unjustified as the bank itself is an aggrieved party in the CSE payment crisis involving its funds to the tune of Rs 25 crore (RS 250 million).

The bank said that its own investigations have proved that there was no evidence of collusion between the bank and CSE brokers or officials. It added that it has enough documentary evidence to show that there was no complicity of either the bank or its officials.

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