No bail to Kundra; SEBI imposes Rs 3 lakh fine on him, Shilpa

A Mumbai court on Wednesday rejected the bail plea of businessman Raj Kundra, arrested in a case of alleged creation of pornographic films and publishing them through apps, after the prosecution contended the police investigation was still on and his release at this juncture will derail the probe.

Meanwhile, market regulator Securities and Exchange Board of India (SEBI) on Wednesday slapped monetary penalty on Viaan Industries Ltd, Shilpa Shetty Kundra and Raj Kundra, for disclosure lapses and consequent violation of insider trading norms.

During the hearing of Kundra's bail plea, his lawyer said his client was not a 'terrorist' and pointed out that a charge-sheet has already been filed in the case which was registered in February.

The 45-year-old businessman was arrested on July 19 by the Mumbai police's crime branch after being charged under relevant sections of the Indian Penal Code, the Information Technology Act and the Indecent Representation of Women (Prohibition) Act.

Kundra, currently lodged in jail under judicial custody, was denied bail by additional chief metropolitan magistrate S B Bhajipale.

On Tuesday, the Bombay high court had also refused to give him any urgent temporary relief.

The public prosecutor opposed Kundra's bail plea, saying he is an influential person and can intimidate witnesses (after being released from jail) which will derail the probe.

Responding to the same, Kundra's lawyer said, "Is Raj Kundra a terrorist? Has he terrorised anyone?"

He was not required to be kept behind bars as the charge-sheet has already been filed and the probe was over, the defence lawyer said.

Also, some of the co-accused in the case are out on bail, the lawyer said.

The police, however, submitted that the investigation of the case was still going on and added statements of the accused were yet to be recorded.

The prosecution further argued that women were forced into the illegal activity and many victims were coming out and speaking about their ordeal.

If Kundra is granted bail, they might back down, it said.

After hearing the submissions of both sides, additional chief metropolitan magistrate Bhajipale rejected the bail plea of Kundra.
The court also denied bail to another accused, Ryan Thorpe.

A detailed order was not available yet.

Later in the day, SEBI imposed a total fine of Rs 3 lakh on the Kundras, to be paid jointly and severally.

Shilpa and Raj are the promoters of Viaan Industries.

The order follows a probe conducted between September 2013- December 2015 to ascertain violation of Prohibition of Insider Trading (PIT) norms by the entities.

In October 2015, Viaan Industries made a preferential allotment of 5 lakh equity shares to four persons and 1,28,800 lakh shares each, amounting to Rs 2.57 crore each, were allotted to Raj and Shilpa in the allotment.

In this regard, they were required to make timely requisite disclosure to the company in terms of PIT norms since the transactions exceeded Rs 10 lakh in value.

'It is on record that the relevant disclosures under the PIT Regulations were made by the Noticees with a delay of more than three years,' SEBI noted.

'Therefore, considering these facts and circumstances, I hold that this case deserves imposition of monetary penalty upon the Noticees,' said adjudicating officer Suresh B Menon in an order.

Noticees refer to Viaan Industries, Shilpa Shetty Kundra and Ripu Sudan Kundra, alias Raj.

Viaan Industries was formerly known as Hindustan Safety Glass Industries Ltd.

The police have claimed that during their probe, it was found that Kundra set up Armsprime Media Pvt Ltd, which, through London-based Kenrin Pvt Ltd, bought 'Hotshots' app to upload objectionable videos on social media.

They had also said Kundra earned over Rs 1.17 crore between August and December last year by uploading pornographic content online through Hotshots.

The police claimed to have found 51 obscene videos -- 35 with Hotshots logo and 16 with BollyFame logo, during searches at the office of the accused.

After Kundra's arrest, the crime branch had described him as the 'key conspirator' of the case.

Kundra, in his plea in the HC challenging arrest, has said the material which the police claimed to be pornographic did not depict explicit sexual acts but shows material in the form of short movies 'which are lascivious or appeal to the prurient interest of persons at best'.