Godman wanted to make hay on short selling hedge fund

The motive was money, nothing else

A "confidential private offering memorandum" of the Nithyananda Investment Fund I, LP (limited partnership), which is in the possession of Deccan Herald, outlines the ambitious, unrestrained profit motives of the Fund that was managed by the Nithyananda Capital Management, LLC (limited liability company).

Deccan Herald exposed in its May 3 edition that Nithyananda was an executive officer and general partner in the Fund that was established with an initial investment of $1.55 million by nine "accredited" and one "non-accredited" investors.  The Fund had its business address in Orlando, Florida.

While claiming that the "there can be no assurance that the Fund will achieve its investment objectives", the document says a second objective of the partnership was to deal in "equities, fixed income, warrants, rights, options and money market instruments". Another interesting target of the Fund, which clearly establishes that it was "hedging", was its high risk "short selling of securities and margin transactions".

Among some of its other goals, the Fund promised investing or trading in "cash commodities, commodity futures, or commodity options contracts".  While claiming that the Fund "is authorised to invest or trade in all types of equity and debt securities…from time to time, the Fund will have cash which will be held in the custody of a bank or broker dealer firm and will be invested in short term instruments including, but not limited, to commercial paper, bank certificate of deposits, US treasury bills and similar instruments".

According to the document, the securities in which the Fund preferred to invest in "are traded on US and non-US national securities exchanges and well-recognised established financial markets". The Fund filed its last annual report with the Florida Secretary of State's office on January 25, 2010.

Bail plea rejected

The District and Sessions Court of Ramanagar rejected the bail application moved by godman Nithyananda on Thursday. District judge C J Hungund observed that the allegations against Nithyananda were serious in nature and that he was likely to deviate the case and destroy evidences.

Nithyananda had pleaded innocence in the petition. The Puducherry police, who have secured body warrant from a court, are waiting to take the goodman into their custody for an investigation in a separate case. At present, Nithyananda is lodged at Ramanagar jail.