Mumbai, May 10: Praveen Kumar Tayal, chairman of Bank of Rajasthan, was arrested in Jaipur today in connection with alleged irregularities in allotment of shares of a company of which he was a director. He was later granted bail, sources close to the bank said.
Tayal was arrested by the Kota police from a five-star hotel in the wee hours of Saturday. The Kota court had recently issued arrest warrants against Tayal, director of Tayal Krishna Capital Market Company, under various sections of the Indian Penal Code, said Ajit Singh, deputy inspector general of police (Jaipur range), and his counterpart in the Kota range, Dalpat Singh Dinkar.
An overseas capital market company, which registered a police case against Tayal and five other directors of his company in 2000, had accused that his company accepted Rs 32 lakh but neither allotted the shares nor returned the money to the firm, Dinkar said.
The Kota police after investigating the case filed a charge sheet against Tayal and the other directors of his company, he said.
Tayal was in the city to attend an internal meeting of the bank. On his way to Kota, where he was to be produced before a magistrate, Tayal showed signs of unease and was admitted to a government hospital in Jaipur, BoR sources said.
B. K. Sharma, chief judicial magistrate of Jaipur, later heard his case at the hospital and granted him bail, sources said.
The news shocked the bank, which is in the process of staging a smart return to profits this year. The case dates back to 1995 when Tayal was a director of Tayal Krishna Capital Market Company, BoR sources said. However, Tayal is no longer connected to this firm.
Alarmed by the developments in Jaipur, the Reserve Bank has started making enquiries on its own.
“It has nothing to do with our bank,” assured K. M. Bhattacharya, managing director and CEO of BoR. The bank’s board will meet in Mumbai on May 12 to take stock of the situation, he added. “The bank enjoys a high reputation in the state and will continue to do so,” Bhattacharya said. He said there was no panic among the bank's customers even though the bank had extended working hours today.
However, banking circles term today’s development as a tremendous blow to Tayal’s reputation and the bank may have to take a call on Tayal continuing as chairman. Even the RBI may be concerned with the fallout of this case.
Bhattacharya said that the case dates back to 1995. Since then Tayal is no longer associated with the company. He took over as chairman of BoR in 1998.
Legal circles contacted by The Telegraph said that Tayal could be held responsible for decisions taken by the said company while he was the director.