The Bhansali scam resulted in a loss of over Rs 1,200 crore (Rs 12 billion).
He first launched the finance company CRB Capital Markets, followed by CRB Mutual Fund and CRB Share Custodial Services. He ruled like a financial wizard 1992 to 1996 collecting money from the public through fixed deposits, bonds and debentures. The money was transferred to companies that never existed.
The company's vice-chairman, S K Jain, was arrested on Sunday night, Bombay Joint Police Commissioner Ranjit Sharma said. Jain has been remanded to police custody till June 16, 1996. Two more directors of the company, Gautam Chopra and Sushil Golcha, and Bhansali's brother-in-law Pukhraj Jain were given remand by the holiday court, Chopra and Golcha, till June 17, 1996 and Pukhraj Jain, till June 19, 1996.
Bhansali, who was absconding after the scam into light last month, was arrested on Sunday night at Delhi's Indira Gandhi international airport by a special team lead by CBI Joint Director Kumauwat Bhat, CBI Director Joginder Singh said.
According to the CBI, the team tracked Bhansali to Hong Kong, learnt he and his family were returning to Bombay, and came back on the same flight, to arrest them at the Delhi airport. Bhansali's counsel, however, claimed Bhansali had surrendered to the authorities.
Cases had been registered against all the accused under sections 120-B and 420 of the Criminal Procedure Code and the Prevention of Corruption Act.
CBI Director Joginder Singh visited the metropolis last fortnight to initiate the probe. During his stay, some raids were conducted and incriminating documents were seized. A special co-ordination cell was also set up and the help of officials from Reserve Bank of India, the Bombay police, the income-tax department was taken in the investigating process, CBI sources said.
Those worst affected by the scam were mutual fund instrument holders who plan to take the matter to court under the aegis of the Investors Grievances Forum. The IGF has staged several demonstrations and even met the prime minister to seek his intervention to protect the interest of small investors.
The CBI had registered a case on May 20 against Bhansali, CRB Capital Markets Limited and some officials of the State Bank of India for cheating the bank of Rs 570 million. The company had allegedly used its SBI accounts to siphon off bank funds, claiming it was encashing interest warrants and refund warrants of principal amounts.
Initial reports revealed that the total amount involved in the scam was over 9.31 billion, including the money belonging to investors, the Unit Trust of India and the Gujarat government.
Of his family, only Bhansali had been arrested. His wife Manjula, his parents, two sisters and child were not detained, Singh said.
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