MUMBAI, July 5 -- A special court on Saturday permitted Central Bureau of Investigation (CBI) to formally arrest Amit Bapna, former chief financial officer of Reliance Capital Ltd (RCL), in its probe into the alleged diversion of bank loans and remanded him to four days' CBI custody. Bapna, who is already in judicial custody in a related Enforcement Directorate (ED) money laundering case and was brought from Tihar Jail on a production warrant, was arrested in court after the judge allowed the agency's application seeking permission to effect his formal arrest. Seeking remand, the investigating agency alleged that complaints from 31 banks and financial institutions revealed that about Rs.9,280 crore in loans sanctioned for specific purposes had instead been siphoned off through shell companies. It alleged that Bapna, who served as CFO during the relevant period, handled the group's financial dealings with banks and financial institutions and, along with former group chief executive Amitabh Jhunjhunwala and others, was among the "mastermind behind siphoning off the said amount". The agency further alleged that the accused had entered into a "deep-rooted conspiracy" to siphon off loan amounts in violation of the terms and conditions under which they had been sanctioned. It told the court that custodial interrogation was necessary to identify all conspirators, unravel the modus operandi and confront Bapna with material already collected during the investigation and statements of previously arrested accused. Opposing the remand, senior counsel Vijay Agarwal argued that the CBI had failed to demonstrate how provisions of the Prevention of Corruption Act were attracted when no public servant had been identified or named in the FIR. The defence also submitted that the dispute had already been settled before the National Company Law Tribunal (NCLT), leaving nothing to investigate, and relied on the Supreme Court's judgement in Vijay Kumar Kela v. CBI to contend that criminal proceedings should not continue after such a settlement. Rejecting the objections, the court noted that Bapna had served as Reliance Capital's CFO during the relevant period and was alleged to have played a role in obtaining loans from various banks before diverting the funds through shell companies. The court held that Bapna was alleged to have obtained loans from various banks and "thereafter siphoned off the same by transferring the said amount to other shell companies against the terms and conditions of the loan". Observing that "opportunity to interrogate him needs to be granted to CBI for effective investigating into the crime", it remanded him to four days' CBI custody. The court also said the defence's objections to the applicability of various penal provisions were "pre-mature" at this stage. Bapna's arrest is the latest in a series of custodial actions by the CBI against ADA Group executives. Over the past few weeks, the agency has similarly secured the custody of former Reliance Communications Group managing director Jhunjhunwala, former Reliance Commercial Finance chief executive Devang Mody and former Reliance Home Finance chief executive Ravindra Sudhalkar in connected bank fraud investigations. The case forms part of the CBI's wider investigation into alleged loan fraud involving Reliance ADA Group companies. The agency has registered multiple FIRs concerning Reliance Communications Ltd, Reliance Home Finance Ltd, Reliance Commercial Finance. The investigation is being monitored by the Supreme Court....