AP High Court rejects Nimesh Kampani bail plea again
August 20, 2009
The Andhra Pradesh High Court has once again rejected the anticipatory bail plea of Nimesh Kampani, Chairman of JM Financial Limited, in the Nagarjuna Finance (NFL) case. The court had agreed to hear the plea provided there was a significant change in circumstances since the Supreme Court referred the case back to the High Court.
NFL, which had raised Rs 100 crore from 85,000 public depositors, began to default in 2001, after it had been sold to Mahalakshmi Factoring Services in September 2000. Kampani, who was a non-executive director, had resigned from the company in 1999. The state government invoked the draconian Andhra Pradesh Protection of Depositors of Financial Establishments Act (1999) to go after NFL’s previous management. It arrested Chairman K S Raju and the then Chief Financial Officer. It also went after the board of directors, including Kampani, Minoo Shroff, L V V Iyer and A P Kurien and even issued Interpol lookout notices against them. Consequently, Kampani and Shroff who had left the country have been forced to remain abroad, while their anticipatory bail plea has been repeatedly rejected.
The high court agreed to hear the bail plea provided there was a significant change in circumstances in the case. It was argued on behalf of Kampani that the police had already attached properties of NFL whose book value was Rs80 crore (the total deposits collected were Rs 100 crore). The AP protection of depositors' statute allows the police to sell these assets and pay the depositors. The public prosecutor apparently confirmed this.
Further, of the 13 complainants, as many as eight had sent in written confirmations that they were paid their dues and wanted to withdraw their complaint. Thirdly, it was argued that the Reserve Bank of India (RBI) and the Registrar of Companies (ROC) had already filed for liquidation of the case in 2004. The matter is apparently coming up for hearing in the next couple of days.
Further, Kampani’s lawyers offered that he would surrender his passport and offer surety to the tune of Rs one crore. Yet, after extensive hearings, the court apparently decided that it was no inclined to change its earlier ruling rejecting the anticipatory bail plea. The decision has shocked corporate India, because it was widely believed that the bail would be granted this time. Nimesh Kampani has now been outside India for eight months since December last year. - By Sucheta Dalal