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Two ex-bankers convicted by HC in 1992 stock market scam

Harshad Mehta

Mumbai : A special court has convicted two former bank officials for cheating, criminal breach of trust and misappropriation of public funds in the 1992 Harshad Mehta stock market scam after observing that the accused persons’ acts can be termed as ‘anti-national’.

Justice Roshan Dalvi, presiding over a special court set up to conduct trial of offences relating to Transactions in Securities Act on October 29 convicted M S Srinivasan, the then Chief Manager of Funds Management Cell (FMC) of the State Bank of Saurashtra (SBS) and R Sitaraman who was then bank officer in the securities division of State Bank of India (SBI).

The duo has been convicted under various sections of the IPC for criminal breach of trust by a public servant and under the Prevention of Corruption Act for dishonestly and fraudulently misappropriating funds of SBS and SBI.

The court has sentenced them to four years rigorous imprisonment and also directed them to pay a sum of Rs five crore each as compensation.

The court, while convicting Srinivasan and Sitaraman, observed that the duo caused tremendous loss aggregating to several hundreds of crores to SBS and SBI unbefitting their position as public servants responsible to the public exchequer.

“In this case, the complainant, the victim, the accuser is (represent) the country at large. It is the coffers of public financial institutions that have been swept clean,” Justice Dalvi said.

“They (Srinivasan and Sitaraman) have degraded themselves by misappropriating public property for illegal and criminal ends causing enormous monetary loss to the public exchequer. Their acts can well be termed as 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 adding the accused not only corrupted themselves but corroded the country.

According to CBI, Mehta and the other accused in connivance with each other entered into various transactions by and between SBS and SBI. Large funds upto hundreds of crores have been paid off/transferred/ siphoned off by the acts of these two accused in connivance with Mehta.

A total of 22 accused faced trial in the scam, of which 14 were public servants from banks and financial institutions and eight were brokers. Harshad Mehta, also an accused in the scam, died few years ago.

Three of them have died while three others were discharged during hearing of trial.

The court acquitted the remaining accused giving them benefit of doubt.

The court also noted that the four-year sentence awarded to Srinivasan and Sitaraman shall be set off if they have undergone any jail term during the trial.

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