Court refuses bail to investment firm director arrested in ₹204 cr fraud

A Mumbai court rejected Jayant Shetty's bail plea for allegedly duping investors of ₹204 crore. The court cited risk of absconding and non-repayment intentions.

MUMBAI: A special MPID (Maharashtra Protection of Interests of Depositors Act) court on Thursday rejected the bail plea of the director of an investment firm, Jayant Shetty, arrested by the Economic Offences Wing (EOW) of the Mumbai police in January this year for allegedly duping several investors to the tune of ₹204 crore with the promise of hefty returns.

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Special judge NP Mehta rejected Shetty’a bail plea, observing that his company neither pay interest on the deposits made by the investors nor return their hard-earned money.

According to EOW, Shetty was the director of Shree Ramanjaneya Leasing and Finance Pvt Ltd, which had accepted deposits from people through various investment schemes and promised them attractive interest on their investments. They allegedly gave out loans using the money invested by the people.

The complainant in the case also invested an amount of ₹45 lakh. However, from November 2017, the firm stopped paying the monthly interest on his investment. According to the EOW, from 2012 to 2017, the company and its directors, Ganesh Shetty, Harish Shetty and present applicant (Jayant Shetty), cheated many investors, by accepting deposits from them under different investment schemes by luring them with high interest rates but not giving them the promised returns.

Shetty had applied for bail, claiming that he was falsely implicated in the case. His lawyer submitted that his company regularly paid interest on the deposits of the depositors until demonetisation took place.

The defence blamed demonetisation for the severe cash crunch faced by the company. The lawyer added that Shetty had to solely take the fall for the company, since his colleagues, the co-accused, absconded and resigned. “It is not a heinous crime as being portrayed but was rather a failure of the business strategy on account of lack of compliance and regulations,” said the lawyer.

The police, on the other hand, submitted that Jayant Shetty, along with the co-accused Ganesh Shetty and Harish Shetty and other directors of the firm, accepted deposits and failed to pay the interest and repay the principal sum to their investors.

“There are 1,861 investors and the amount of investment defrauded by applicant’s company is to the tune of ₹204 crore,” said the prosecutor, adding that, “there are more than 3,023 investors who have invested in fixed deposit scheme and recurring deposits for a period of 12 months, 5 years and 3-6 months respectively.”

Citing the possibility that the accused might abscond if granted bail, the prosecution urged the court to reject the plea. The court accepted the argument and noted that the accused might abscond or threaten the prosecution witnesses, if released on bail. The court also said the accused “have money with them but have not deposited a single penny in the court for repayment of deposit of investors, which is public money.” The judge rejected Shetty’s bail plea on the grounds that the accused had no intention to repay the deposit of the investors.