Rose Valley Group owner Gautam Kundu was remanded in ED (Enforcement Directorate) custody on Thursday.
Even as his lawyer argued strongly for bail, the court granted ED custody of the alleged ponzi operator till March 31.
Hundreds of Rose Valley employees massed near Bankshall Court and shouted slogans against the ED as Kundu was led away amid tight security. Some rabble rousers reportedly broke away from the herd and targeted a section of mediapersons, whom they held responsible for Kundu’s arrest.
The mediapersons were heckled and beaten up by Rose Valley agents, as the cops turned mute spectators.
Though Kundu was produced in court at 1.30 pm, proceedings got under way at 2.40 pm as his lawyer borrowed some time to prepare his bail petition. The hearing continued for an hour, sources said.
The ED’s lawyer took the floor claiming Kundu raised huge money from unsuspecting people with a promise to double their investments. “Rose Valley agents went around peddling ‘secured debentures’, ‘fixed deposits’ and other schemes and collected huge money from people promising big returns.
“However, it (Rose Valley) didn’t have the necessary clearance from SEBI (Securities & Exchange Board of India) to even use the word ‘debenture’ when it came to selling these products. Many fell for these supposedly lucrative schemes and were cheated,” ED’s lawyer was quoted as saying in court.
However, Sandipan Ganguly, Kundu’s lawyer, argued that the Calcutta High Court had already ordered an interim stay on his arrest. He said the high court is to issue a final verdict on the stay on Friday.
He said the ED flouted the high court order by the arresting Kundu while the interim stay is in force.
However, the court rejected the bail prayer and sent Kundu to ED custody for five days.
ED’s lawyer said Kundu had no permission from SEBI to run his chain marketing business in the name of Rose Valley Group of Companies.
The money, thus raised, was pumped into Rose Valley’s plum property projects and a part of the funds was laundered to other companies it owned.
However, the funds were later entered as losses in the company’s balance sheets.
“The Rose Valley chairman did not co-operate with ED officials. We have information that a part of the money was transferred to undisclosed accounts. He (Kundu) even withheld information on the money trail. This was why he was arrested,” the ED counsel said.
The ED officers believe that more than 15,000 crore was raised from depositors, which was six-times more than what the Saradha Group collected.