The Enforcement Directorate on Wednesday arrested Rose Valley Group chairman Gautam Kundu in connection with the multi billion rupee ponzi scam.

ED sources said Kundu was taken into custody after he failed to give proper answers during sustained questioning spread over six hours on being summoned to its office.

Kundu allegedly suppressed information and did not provide details about the quantum of money collected by his group companies from the market by promising huge returns.

The company also raised money through time-share schemes, promising the public that their deposits could be redeemed on maturity in the shape of accommodation in its hotels.

The group - involved in sectors like realty, hospitality, media and films - has been under the scanner of various central agencies including market regulator Securities and Exchange Board of India (SEBI), the Serious Fraud Investigation Office (SFIO) and the ED.

Kundu, who had arrived at the ED office around noon for grilling, was taken to a local hospital after his arrest. He would be produced in court Thursday.

Soon after Kundu's arrest, a group of Rose Valley employees shouted slogans and staged a protest demonstration before the ED office.

Group managing director Shibamoy Dutta said the arrest was made despite its "cooperation with all central agencies involved in the probe".

"I have just now spoken to Gautam Kundu. On behalf of ED, no paper has been shown to him. He told that he has been arrested. But he hasn't been told why. The Rose Valley group has cooperated with all the central agencies which are conducting he probe," Dutta said.

The group came into focus after the Saradha ponzi scam broke in early 2013. The same year, the corporate affairs ministry named Rose Valley as one of the 73 companies involved in ponzi schemes in West Bengal.

Having cast its net across the states of West Bengal, Tripura, Assam, Odisha, Jharkhand and Maharashtra among others, the company is alleged to have raised close to Rs.15,000 crore.

Found guilty of running "collective investment scheme" (CIS) without necessary approvals, the SEBI in June 2014 had ordered the company to refund the money to the investors and barred it barred from accessing the securities market.

The SEBI had also warned the company of attachment and recovery proceedings if it failed to refund the money.

Earlier, SEBI in 2011 had passed an interim order barring the group from raising public money through its unapproved CIS.

The group had then moved the Calcutta High Court challenging the order but it was dismissed. It then filed an appeal before a division bench challenging the legality of the order. However, the higher bench too dismissed the appeal in July 2013.

Subsequent to the appeal's dismissal, the SEBI ordered refund of investors money.

While the ED attached 2,631 bank accounts of the group involving Rs.295 crore in November 2014, a Calcutta High Court division bench put a stay on the search and seizure order of the central agency.

Its properties were confiscated in Odisha following a court order on February 25.

Union Finance Minister Arun Jaitley in December last year had told the Rajya Sabha that the Rose Valley Group of companies had collected an estimated Rs.15,000 crore from investors.

Minister of State for Finance Jayant Sinha, in a written reply to the Rajya Sabha last month, had said the Saradha Group and the Rose Valley raised Rs.12,740 crore illegally.

According to Sinha, investigation revealed that the Rose Valley Group raised as much as Rs.10,281 crore from investors while Saradha firms had mobilised Rs.2,459 crore.

The Rose Valley Group was one of the sponsors of Indian Premier League city franchise Kolkata Knight Riders, and were also the title sponsor of an international chess meet in Kolkata in 2012.

inputs @Yahoo.com

- Manohar