A court here rejected the bail plea of Gautam Kundu, chairman of Rose Valley Group, and remanded him to five days' ED custody till March 31.
Chief judge of City Sessions Court Md Mumtaz Khan rejected the bail petition moved by the respondents and remanded Kundu to five days' custody of the agency.
Kundu was arrested by ED yesterday under Prevention of Money Laundering Act (PMLA).
Judge Khan in his order said that given the nature and gravity of the case and keeping in mind the interest of investors, the bail plea was rejected.
ED counsel Bhaskar Banerjee told the court that the agency had acted on the basis of a complaint filed by SEBI.
He said that Rose Valley was issuing debentures without the sanction of SEBI and mobilised huge money from the public amounting to a financial fraud and prayed for five days of custody for further interrogation.
Kundu was also not cooperating with the investigation agency and was not giving correct information, he said.
The counsel, appearing for Kundu, Sandipan Ganguly, argued that the Rose Valley chairman was arrested illegaly as a division bench of the Calcutta High Court had passed an order in November, 2014 saying that no coercive action could be taken against the person till further orders.
His arrest was tantamount to coercive action and amounted to contempt of court, the counsel argued. He also maintained that Rose Valley was issuing debentures on a private placement basis and not to the public.
Countering this, ED counsel said that the arrest of Kundu did not amount to coercive action and that ED was fully within its rights to arrest Kundu under section 19 of PMLA.
Rose Valley had also issued debentures to public in huge amounts, he said.
