Rai, who appeared before a Mumbai Court, confessed and confirmed his presence at the spot where Indrani's daughter Sheena was killed.
"I am aware about the acts connected with commission of the offence;I was a participant in the murder of Sheena. She was killed by strangulation," Rai told court.
Meanwhile, the court extended the judicial custody of Indrani, Peter, Rai and Sanjeev Khanna till May 17.
Indrani along with her husband Peter, former husband Khanna and former driver Shyamvar Rai, is an accused in the murder case of her daughter Sheena Bora in 2012.
While former media baron Peter was arrested in November 2015 for hiding and destroying evidences in the murder case, Indrani and two others were arrested by the police in August 2015 and continue to be in custody since.
Media magnate Peter Mukerjea, a co-accused in the case, had earlier in March moved a fresh bail plea before a special CBI court, calling the allegations levelled against him as "false, baseless and unbelievable". He also put the onus on his wife Indrani, saying that she was highly ambitious and was willing to go to any length for that.
In the bail application, Peter claimed it was not him, but Indrani, who objected to Rahul and Sheena's relationship. He had also denied the allegation of being informed by Indrani about the murder and stated that the said calls were made by Indrani to her daughter Vidhie.
The media honcho was arrested on November 19 last year for his alleged role in the murder conspiracy in which his wife Indrani Mukerjea is the prime accused