New Delhi, April 14 : A former railway official has been arrested for duping 350 people of Rs. 85 crore under the garb of trading through National Stock Exchange (NSE) and other financial institutions, police said on Tuesday.

Ashok Kumar, 68, a resident of Mehrauli in south Delhi, was arrested on Monday.

A case was registered against Kumar on April 10 following the allegation that the directors and other employees of Kassa Finvest Pvt. Ltd., Kassa Holdings & Consultants Pvt. Ltd. and its sister concerns, have committed misappropriation of funds, breach of trust and cheating.

It was being done under the garb of having authorisation of financial activities and trading by NSE, SEBI and others.

It was found that the accused used to operate through a network of branches in major metropolitan cities of the country and contacted the gullible investors through their executives.

\"The investors initially invested small amounts, but kept on increasing their investments on inducement by promise of high returns. It was represented that money of the buyers would be kept as securities and they would be paid Loyalty bonus.

\"But they used the money in meeting the official expanses and expansion of their business, in the process making wrongful gains at the cost of investor\'s money,\" a police official said.

A reference from NSE was also received in which it has been alleged that about 350 complaints of investors valuing around Rs. 85 crores have been received in their office against the alleged companies,\" the official said.

The company used to induce the investors to invest their money, scripts with the alleged company by assuring them that no trading will be done with the amount so invested and the same will be kept in the account of the alleged company as margin money.

However, the alleged company sold all the scripts and invested the amount so raised in meeting the official expenses of the company and in the expansion of its business, in the process of gaining personal enrichment for their own vested interests.

Kumar, a B-tech, claims to be a gold medalist and having topped the combined engineering services exam conducted by the UPSC.

He joined the Indian Railways in 1960 and worked at senior positions and took retirement in 1995.

Former railway official held for Rs. 85 crore cheating