WWW- The boss of eBay’s Indian subsidiary – Baazee.com – has been remanded in custody until 24 December after his arrest on charges of online trading in pornography.

Police cuffed US national Avnish Bajaj following the revelation that an Indian college student had offered an MMS of two of his peers indulging in a sex act for sale on the auction site. Despite protests from eBay that the two minute clip contravened its acceptable use policy and had been immediately removed upon discovery, a New Delhi magistrate refused Bajaj bail, saying: “The investigation of the case is still in progress and the offence alleged does not warrant grant of bail to the accused.”

The video in question was not actually shown on Baazee.com but rather punted by Ravi Raj Singh, 23, a student of the Indian Institute of Technology at Kharagpur in West Bengal. It features two students from Delhi Public School.

Singh was arrested last Wednesday on the charge of selling the clip on Baazee.com to eight people. Police have also issued a warrant for the arrest of one of the video’s 17-year-old stars. The latter has become a bit of a celebrity after circulating the MMS to his friends, after which it escaped into the wild and has proved a big hit across India.

For its part, eBay last week issued the following press statement:

Baazee.com, eBay’s wholly owned subsidiary in India, is an online marketplace which brings buyers and sellers together. In late November a Baazee.com user attempted to sell a controversial pornographic video clip on the site. The video clip itself was not shown on the site; the seller offered to email the clip to buyers directly. The listing violated Baazee.com’s policies and user agreement and was removed from the site once it was discovered.

Like eBay, Baazee.com strives to offer a transparent, trustworthy and safe trading environment and the company takes very seriously any breach of its acceptable use policy. Baazee.com executives, including its count

Baazee.com executives, including its country manager Avnish Bajaj, have been closely cooperating with the New Delhi police to trace the seller in question. The information we have provided has allowed the police to locate and arrest the seller.

We are outraged that Mr. Bajaj, who had voluntarily traveled to New Delhi to further cooperate with the police on this case, was arrested and today sent into judicial custody without bail until December 24. The arrest was unexpected and completely unwarranted. It is unfortunate that local law enforcement has chosen to misdirect its energies towards Mr. Bajaj. eBay is working to secure Mr. Bajaj’s release from jail as soon as possible.

If the authorities pursue their case against Bajaj, he faces a possible jail term of up to five years and a fine of Rs.100,000 ($2,275)