Bail for India auction portal CEO

The boy allegedly circulated the clip via mobile phones

An Indian court has granted bail to the chief of an auction website who is in jail in connection with the sale of a school sex video clip.

Avnish Bajaj, country manager of Baazee.com which is owned by the US-based eBay Inc, has however been ordered not to leave the country.

The video clip showing a sexual act between a teenage boy and girl from a leading Delhi school has shocked India.

But the case is also being closely followed by the United States.

Mr Bajaj is an American citizen and the US State Department said the situation was one of concern "at the highest levels of the US government".

"The Secretary [of State] has been following it closely," State Department spokesman Richard Boucher told reporters in Washington.

Outrage

Police arrested Mr Bajaj on Friday under India's information technology law, which prohibits the use of the internet to distribute obscene or pornographic material.

On Tuesday Judge Vikramjit Sen of the Delhi High Court ordered his release after he posted a 200,000 rupees ($4,500) bail.

Bazee.com has reacted strongly to the arrest of Mr Bajaj saying the clip was removed from the website as soon as the contents became known.

The alleged seller of the clip, an engineering student, has already been arrested.

Transmitting or selling pornography is illegal in India, but possessing or viewing it in private is not.

Schoolboy questioned

On Monday a juvenile court ruled that a schoolboy, detained in connection with the case, could be questioned by police for a day in the presence of his father and a social worker.

The boy allegedly recorded a sexual act between himself and a 16-year-old schoolgirl on his mobile phone. The pictures were then circulated across India and abroad.

Police say the clip, lasting two minutes and 37 seconds, was copied on to video CDs and sold.

Both the boy and the girl have since been expelled from the school, one of Delhi's leading institutions.

A senior police official said the girl involved had left Delhi but could be questioned if necessary.