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Over two decades after the 1992 securities scam broke, a Special Court has found two former bank officials guilty of “sweeping the country’s coffers clean”.
The two officials, M S Srinivasan, former chief manager of State Bank of Saurashtra’s Fund Management Cell, and R Sitaraman, attached to the securities division of the State Bank of India, were sentenced to four years rigorous imprisonment and a fine of Rs 5 lakh each for criminal breach of trust under the IPC and misappropriation of funds under the Prevention of Corruption Act.
Srinivasan will have to pay Rs 5 crore additionally as compensation because of embezzlement, the court said.
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The scam was exposed in 1992 following several irregularities in securities transactions and fund management by banks and financial institutions, forcing the government to appoint a Joint Parliamentary Committee to probe it and take action based on the committee’s reports.
The prosecution recorded statements of 44 witnesses and produced 650 documents. Of the total 22 accused, three, including key accused Harshad Mehta, are dead, while three were discharged earlier. That left the court with 16 accused, of which it gave the benefit of doubt to 14 of them and convicted two.
Quoting Napoleon Bonaparte, Justice Roshan Dalvi said, “To punish less, punish more severely”. The court also said Mehta became the recipient of “divine justice”. It found the actions of the guilty men to be anti-national, besides “corroding” the economy. “ They are seen to have degraded themselves in misappropriating public property for illegal and criminal ends causing enormous monetary loss to the public exchequer. Their acts can well be termed anti-national as such acts had caused a tremendous economic strain and drain upon the country resulting in the scam of 1992,” Justice Dalvi said.
The punishment ought to account for the unjustifiable economic loss caused to the country while reflecting the denunciation of their manoeuvre, the court said.
Mehta, who died in 2001, was found to be the connecting link between these two men in their complicity in the securities fraud. The modus operandi ostensibly revolved around fraudulent transactions of hundreds of crores carried out by the two accused in Mehta’s account. He had current accounts in both banks but the account in SBS, the court thought, was the “best testimony” to the transactions, while the SBI account did not reflect these transactions.
In his defence, Srinivasan had argued that he had lifted SBS from the dumps by introducing business efficacy in borrowing transactions of SBS despite a huge surplus of Rs 1,100 crore. Meanwhile, Sitaraman claimed his superiors at the SBI had a role to play in facilitating the transactions involving Mehta.
Justice Dalvi in the 136 page judgment noted, “In this case, the complainant, the victim, the accuser, is the country at large. It is the coffers of public financial institutions that have been swept clean.”
The court said that though some of the amount was recovered and transferred to the public exchequer, the remaining portion had been lost forever. “It would take years before those monies finally find the place where they belong. Until then, the victimisation of society would be due and so must the punishment,” the judge said.
The men were accused of criminal conspiracy and breach of trust while discharging duties as public servants in financial institutions.
They were also accused of falsification of accounts, forgery, cheating, forging valuable security, besides receiving stolen property, credit and debit vouchers and issue of cheques on behalf of their respective banks.
aamir.khan@expressindia.com
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