After arresting Nagarjuna group chairman K S Raju and Maytas Infra chief executive officer P K Madhav, Andhra Pradesh police now focus on Nimesh Kampani.
HYDERABAD: After arresting Nagarjuna group chairman K S Raju and Maytas Infra chief executive officer P K Madhav for their role in harming the interests of depositors of Nagarjuna Finance Ltd, the Andhra Pradesh police are now focussing on JM Financial chairman Nimesh Kampani.
He was one of the non-executive directors of Nagarjuna Finance till April 1999, when the non-banking finance company (NBFC) was plunging into asset liability problems.
A senior police officer in Hyderabad told DNA Money that Kampani has been named Accused Number 3 in the case.
“We have information on Kampani’s role in causing the alleged loss to the depositors of Nagarjuna Finance. We are dealing with the technicalities in proceeding against him though he has already been named Accused Number 3,” the official said.
Kampani could not be reached for comments.
However, a source close to Kampani, on condition of anonymity, said that he was an independent director in Nagarjuna Finance till April 1999 and there were no problems in the company till he resigned on April 28, 1999.
“It was only in 2001-02 that Nagarjuna Finance started facing problems. Instead of tracking down the NBFC’s current directors, the Andhra Pradesh police are chasing past directors,” the source said.
Interestingly, Kampani is also an investor in Maytas Properties, which was recently in the news following a botched-up takeover bid by Satyam Computer Services.
Nagarjuna Finance, an NBFC under the Hyderabad-based Nagarjuna group, was into deposit mobilisation and hire-purchase activity besides various other financial services.
The company had 90,000 depositors and had raised close to Rs 100 crore.
However, as the default rate in its hire-purchase business increased and markets turned hostile to the finance business, the company failed to honour the commitments made to depositors.
The Nagarjuna group then sold the NBFC to Mahalakshmi Factoring Services.
Eventually, Nagarjuna Finance quietly shut down, leaving depositors in a lurch.
After a number of complaints filed by depositors with various authorities, the Central Crime Station (CCS) in Hyderabad finally held Raju and Madhav, both of whom have been remanded to judicial custody till December 29. Raju complained of chest pain after spending a day in the Chanchalguda prison and is currently being treated at the Nizam’s Institute of Medical Sciences in Hyderabad. Madhav is still in prison. “We have the list of directors responsible for the collapse of Nagarjuna Finance. Some are absconding and we are looking for them,” the police officer said.
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