The Hindu : Front Page : NFL promoter, director arrested in Hyderabad

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Tuesday, Dec 16, 2008
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NFL promoter, director arrested in Hyderabad

Staff Reporter

700 warrants issued were pending against them: DCP

The NFL was set up in 1982 by Chairman of Nagarjuna Group K.S. Raju
Crisis erupted when it failed to return matured deposits since 1999

HYDERABAD: Hyderabad police on Monday arrested K.S. Raju and P.K. Mahadevan, original promoter and director respectively of Nagarjuna Finance Limited, that has been facing hundreds of cases of failure to repay its depositors.

Hyderabad Detective Department DCP R.S. Praveen Kumar said they were arrested under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act while nearly 700 warrants issued by courts across the country were pending against them. The NFL was set up in 1982 by Chairman of Nagarjuna Group K.S. Raju.

It raised deposits worth crores of rupees from people assuring a high rate of interest.

Crisis erupted when the company failed to return matured deposits since 1999. Hundreds of depositors lodged complaint with the police across the State while the company management secured order from the High Court staying proceedings against them by the police.

NFL’s stand

Meanwhile, the NFL in 2000 announced that it was acquired by Mumbai-based Mahalakshmi Factoring Services Limited and hence was absolved of repaying the depositors.

Counter-petition

Following a counter-petition filed by the Hyderabad police a few months ago, the High Court vacated the stay order on September 18 clearing the way for legal action against the company.

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