The Hindu : Ex-Minister may be arrested in bond scam

Online edition of India's National Newspaper
Tuesday, Apr 30, 2002

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Ex-Minister may be arrested in bond scam

By Our Special Correspondent

MUMBAI April 29. The former Maharashtra Minister of State for Energy, Sunil Kedar's passport is being impounded and he is likely to be arrested soon because of a bond scam of the Nagpur Central Cooperative Bank that he heads.

An agitated Opposition Shiv Sena-BJP members forced the Government to concede their demands that Mr. Kedar, now in the NCP, be arrested and his passport be impounded. The Chief Minister, Vilasrao Deshmukh, said the State CID would complete the investigation in a month and a statement would be made in the House tomorrow about the arrest. But he rejected the demand to call for a CBI inquiry in the scandal.

The bank had bought bonds of little-known companies and also the State corporations at a premium through brokers, ignoring all norms and rules. It had also lent Rs. 40 crores to Eurodiscovery India Ltd. of Mauritius against their `non-existent' collateral. Besides, the Reserve Bank had found that most of the bonds that the bank had bought were never delivered to it.

The scam was discovered by the Reserve Bank and NABARD officials recently and their report is now with the Government. A CID case had been registered and the Cooperation Department has served a show-cause notice to the Board of Directors asking them to cite reasons why the board should not be dissolved, the Government statement said.

But the Opposition would not be satisfied and their din twice forced the adjournment of the House. Mr. Deshmukh indicated that action would be taken against Mr. Kedar.

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Ex-Minister may be arrested in bond scam