Court refuses bail to accused in investor fraud case

Mumbai court rejects bail plea of director in ₹8 crore investor fraud case at Malaika Credit Society, involving duping over 70 investors.

MUMBAI: A special MPID court has rejected the bail plea of Manohar Raghunath Shetty, the director of Malaika Multi State Co-operative Credit Society, in connection with an investor fraud involving the credit society.

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Shetty was booked for committing fraud worth ₹8 crore and of duping more than 70 investors. As per the prosecution, the complaint was lodged by a couple who alleged that they invested ₹30 lakh in fixed deposit, ₹22 lakh in recurring deposit, and purchased shares in the co-operative credit society. Shetty, who is the director of the society, along with the chairperson, failed to return the amount invested by them upon maturity. The prosecution further submitted that Shetty was aware of the transactions and investments made by the informant and other investors.

Shetty’s advocate, Sachin Nagare, submitted that the audit report mentions him as the director, and he had not lured the investors to invest their money. Out of the three cases registered against Nagare, he was released on bail in two. Further, they submitted that he was already in jail for a crime registered in Thane and was arrested again when he was released on bail.

The court observed that Shetty was aware of the investments and transactions, since he was the society’s director from 2014. While rejecting bail, judge NG Shukla observed that even if the accused was behind bars for another crime and was not arrested within the stipulated time, that cannot be used as grounds for bail.

The court further said that the accused “committed fraud of ₹8,46,28,334, depriving more than 70 investors from the benefit of their investment.”

In November last year, the Bombay high court had granted bail to four individuals who were arrested in the ₹225 crore fraud case at the Mira Road-based Malaika Multi State Co-operative Credit Society.

In the original case, Gilbert Baptist, who controlled the credit society through dummy directors, had diverted funds to the tune of ₹200 crore belonging to thousands of depositors, to his private business enterprises, and to acquire properties for himself, his family members and aides.