Seven convicted in 1992 security scam cases

The Special Court hearing the 1992 security scam cases, on Wednesday sentenced Sudhir Mehta, brother of late Harshad Mehta, and six others, including four bank officials, to rigorous imprisonment

The Special Court hearing the 1992 security scam cases, on Wednesday sentenced Sudhir Mehta, brother of late Harshad Mehta, and six others, including four bank officials, to rigorous imprisonment RI ranging from 1 year to 10 years on the charge of duping State Bank of India to the tune of Rs 600 crore in connection with the securities scam that rocked the financial markets in 1992.

Sudhir Mehta was sentenced to 1 year jail term. The court awarded 10 years rigorous imprisonment to R. Sitaram and 7 years to Bavdekar and Srinivasan for three years 8212; all three were the employees of SBI 8212; and five years to V. Deosthali, an employee of UCO Bank.

Justice S.K. Shah of the Special Court, however, acquitted Ashwin Mehta, another brother of late Harshad Mehta and two SBI officials Kailash Ram and Padhya for want of evidence.

Two employees of Harshad Mehta8217;s office, Paresh Shah and Atul Parekh, were also sentenced to 1 year rigorous imprisonment each. The court, however, stayed the operation of its order to enable the accused file an appeal in the Supreme Court.

According to the prosecution, the accused had actively participated in the conspiracy to dupe SBI to the tune of Rs 600 crore. The case against Harshad Mehta was abated after his death.

The Securities Scam of 1992 was the mother of all Indian financial scandals. It exposed the utter lawlessness and absence of supervision in the money markets; it allowed funds to be transferred with impunity from banks and corporate houses into the equity markets; and saw thousands of crore of bank funds to move in and out of brokers8217; bank accounts in what was later claimed as a 8216;8216;accepted market practice8217;8217;.

A Special Court under a separate act of Parliament was set up and over 70 cases were filed by the CBI.

Story continues below this ad

The Special Court had earlier convicted the former chairman and managing director of UCO Bank K. Margabanthu for his involvement in the Harshad Mehta-perpetrated scam. The court also convicted the former general manager of UCO Bank, R. Venkatkrishnan and assistant general manager, S.V. Ramanathan. Besides, two National Housing Bank officials, C. Ravikumar, and Suresh Babu were also convicted.

Many of the key figures in the 1992 stock scam 8212; Harshad Mehta, Khemani, a senior official of SBI, R.L. Kamat and former SBI managing director P.V. Subba Rao 8212; are no more. The then chairman of SBI, M.N. Goiporia, was asked by the Government to leave and he too had passed away shortly thereafter. M.J. Pherwani, chairman of National Housing Bank which figured in the scam, had also passed away earlier.