Sucheta Dalal :AP High Court quashes Interpol alert against Kampani
Sucheta Dalal

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AP High Court quashes Interpol alert against Kampani  

October 14, 2009


The Andhra Pradesh High Court today quashed the Interpol Red Corner alert on Nimesh Kampani, Chairman of J M Financial Limited and the other directors in the Nagarjuna Finance (NFL) case. The AP High Court also admitted the case for hearing after which the bail issue will be decided.
 Given the quashed Interpol alert, Kampani and Minoo Shroff, who had left the country and were forced to remain abroad, will now be able to return to India without fearing arrest. Kampani has been outside India from December last year. With the new developments in the case, he now also stands a chance to be released from the case.
NFL, which had raised Rs100 crore from 85,000 public depositors, began to default in 2001, after it had been sold to Mahalakshmi Factoring Services in September 2000. Minoo Shroff, Nimesh Kampani (chairman of JM Financial), AP Kurian (who heads the Association of Mutual Funds in India) and LVV Iyer (a top Hyderabad-based corporate lawyer), were all independent directors of NFL for a brief spell until the year 2000. Kampani, in fact, resigned in 1999. Until then, NFL, which had raised Rs100 crore from 85,000 depositors, had not defaulted on its repayment obligations.
The State government invoked the Andhra Pradesh Protection of Depositors of Financial Establishments Act (1999) to go after NFL’s previous management.The vicious turn to the NFL story began in December 2008 with the AP police arresting NFL’s former chairman & managing director, KS Raju, and a former director PK Madhav. They had nothing to do with the company for eight long years.
It also went after the board of directors, including Kampani, Shroff, Iyer and Kurien and even issued Interpol lookout notices against them. Kampani and Shroff who had left the country had been forced to remain abroad, while their anticipatory bail plea had been repeatedly rejected.
In the last hearing held in August 2009, while appealing for anticipatory bail, the lawyer 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 Rs100 crore). The AP protection of depositors' statute allows the police to sell these assets and pay the depositors.
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.
- Amritha Pillay [email protected]

-- Sucheta Dalal