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Two persons arrested by the Central Bureau of Investigation in connection with the multi-crore Madhavpura Mercantile Co-opertive Bank scam were remanded to CBI custody till June 17 as the agency claimed to have recovered substantial amount of proofs to file chargesheet against the accused in the case which also includes big bull Ketan Parekh.
Shirish Manyar and Mukesh Babu arrested in Mumbai on Wednesday were produced before the designated court in Ahmedabad on Thursday, which remanded them to CBI custody for five days, agency sources said.
The official and residential premises of the duo, who had been sent on a two-day transit remand on Wednesday by a Mumbai court, were searched by the CBI.
According to the CBI first information report, Manyar runs SBM Investments, Babu is the owner of Mukesh Babu Securities and both of them had sought an overdraft to the tune of several crores of rupees thus violating the Reserve Bank of India guidelines.
The CBI alleged that Babu, through his five accounts with Madhavpura Mercantile Co-operative Bank had illegally borrowed and diverted funds to the tune of Rs 205 crore (Rs 2.05 billion).
Similarly, Manyar had also illegally diverted funds to the tune of Rs 25 crore (Rs 250 million) by allegedly entering into a criminal conspiracy with the chairman of the bank Rameshchandra Parekh and Ketan Parekh.
The CBI has already arrested the bank chairman, Ketan Paresh, Devendra Pandya, Vinit Parekh and Yogesh Mehta in the case registered in May 2001.
The scam rocked the Madhavpura Mercantile Co-operative Bank following which the Reserve Bank of India had to appoint an administrator to run the bank.
Initially, the case was registered by the Gujarat Police but it was transferred to the CBI following direction of the Gujarat high court.
According to the CBI FIR, the Credit Deposit Ratio of 19 companies, having account with MMCB, had increased to 131.5 per cent as against 65 per cent directed by the RBI.
The 19 companies of which 11 belonged to Ketan Parekh, had withdrawn Rs 1030 crore (Rs 10.30 billion) from the bank as against Rs 299.5 crore (Rs 2.99 billion) prescribed by RBI.
The CBI has registered a case under section 405, 406, 408, 409 and 420 and 35A of the banking regulations against Parekh and the others.