1992 securities scam: Senior bank officials among five jailed

A special court has convicted and awarded varying jail terms to five persons including senior bank officials in the 1992 securities scamJustice Shalini Phansalkar Joshi who presided over a bunch of cases related to the 1992 scam convicted R Lakshminarayanan and S Srinivasan of Financial Fairgrowth Services Limited FFSL and Tharian Chacko Y Sundara Babu and R Kalyana Raman of Andhra Bank Financial Services Ltd ABFSL a subsidiary of Andhra BankWhile the court sentenced Lakshminarayanan and Srinivasan executive director and senior vicepresident respectively of FFSL at that time to imprisonment up to three years the officials of ABFSL were sentenced to four yearsAccording to the judgement passed on Thursday those convicted knowingly conducted fraudulent transactions between FFSL and ABFSL between July 1991 and May 1992As per the prosecutions case FFSL a private firm was facing an acute cash crunch and was desperately in need of additional fundsIt thus began to borrow heavily from ABFSL and other banks and financial firms Those convicted facilitated such borrowings without ensuring that the transactions were made against credible securities and stocks of the FFSLABFSL officials convicted in the case issued illegal security receipts to the FFSL for these transactions and it in turn made wrong declarations to other lenders by giving these security receipts that had been issued against securities and stocks that the FFSL did not really possessThe court however acquitted Gopal Shankar Iyer and P Chandrashekhar two other officials of FFSL and share broker Pallav SethThe court also rejected the plea for leniency pressed by the convicts on account of the long trial their old age and on the argument that they did not make any personal gains out of these transactionsThis special case is a fallout of the financial scam that rocked the economy of the nation in the era of Harshad S Mehta Justice PhansalkarJoshi saidIt is true that in this case the offence has taken place in 1992 and that in these 24 long years the accused have undergone the rigours of the trial which were in the nature of physical and mental torture also as the sword of this case was always hanging on their heads she saidHowever considering the serious nature of the offence and the repercussions it had on the nations economy taking a lenient view can have a countereffect An appropriate message needs to be sent out to the society she saidIn my considered opinion the evidence of all these prosecution witnesses some from FFSL some from ABFSL and some from an independent source like RBI is more than sufficient to prove beyond reasonable doubt that ABFSL has deployed crores of funds to FFSL on securities receipts which were to their own knowledge not backed by physical securities and it was done by the ostensible transactions of sale and purchaseTheir evidence also proves that the money received by FFSL from ABFSL in these transactions was diverted by FFSL to share market investment and not for purchase of securities she saidJustice Phansalkarb Joshi added that even if the court were to accept the contention that the convicts did not make any personal gains it must remember the view taken by the apex court in previous judgements that financial scams affect the economy of the nationSuch scams result in the loss of hardearned money for many innocent members of the public Some victims even lose their lives she said while awarding the sentenceThe court however suspended the sentence of all the convicts for four months to permit them to file their respective appeals in the Supreme CourtCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updatesThis story has been sourced from a third party syndicated feed agencies Except for the change in headline the story has been provided ASIS AS AVAILABLE without any verification or editing from our side Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever