A special court on Tuesday convicted four bank officers for criminal breach of trust and falsifications of accounts in a 25-year-old multi-crore securities scam cases involving the famous stockbroker, Harshad Mehta
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A special court on Tuesday convicted four bank officers for criminal breach of trust and falsifications of accounts in a 25-year-old multi-crore securities scam cases involving the famous stockbroker, Harshad Mehta. Even as the four were convicted, one other accused PS Gokhale was acquitted while two others - Harshad Mehta and MV Shidhaye - are now dead.
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Sessions court judge HS Mahajan convicted Mayuram Srinivasan (69), then funds manager of State Bank of Saurashtra, DN Road, R Sitaraman (64) attached at the time to the securities division of the State Bank of India, Vinayak Deosthali (65), then assistant manager of UCO Bank, Hamam Street, and PA Karkhani (68), former senior manager, UCO Bank under sections 409 (Criminal breach of trust by public servant, or by banker, merchant or agent), 477 (Fraudulent cancellation, destruction, etc. of will, authority to adopt, or valuable security) along with conspiracy of the IPC and relevant sections of PC Act.
The prosecution's case was that in 1991, all nationalised banks were asked to keep a percentage of its deposits with the RBI on a fortnightly basis, called the Cash Reserve Ratio; another chunk was also to be invested in securities called Statutory Liquidity Ratio.
So as long as the banks maintained their ratios, they could borrow or lend from each other - albeit from one authorised branch (Call Money Transactions) - without any involvement of brokers or third parties.
However, according to the prosecution, officers of the Fund Management Cell of the State Bank of Saurashtra, DN Road - the authorised branch for Bank of Saurashtra -in connivance with UCO bank's Hamam Street branch, were debiting and crediting the personal current acounts of Mehta at the Hamam Street branch under the guise of CMTs.
This, the prosecution claims, led to losses to the bank in terms of interest, at the time as high as 40 per cent. The transactions - six instances of borrowing and seven instances of lending - to the tune of crores of rupees, came under the scanner in 1991.
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