After 24 years of Rs. 700 crore securities scam by Harshad Mehta, the Bombay High Court has convicted six people including his brother Sudhir Mehta.
The case was closed after the prime accused Harshad Mehta’s death on 23rd April, 2002. The accused who were convicted including three bank officials, R Sitaram an officer with the State Bank of India; Seetapathy Suresh Babu an assistant manager and Coodli Ravikumar, assistant general manager of the National Housing Bank and two stock brokers Deepak Mehta, the cousin of Harshad Mehta and Atul Parekh.
The High Court has given only six months imprisonment to Sudhir Mehta, Suresh Babu was given 3 years in jail and four years imprisonment to Sitaram and Ravikumar. The other two had charges similar to those against Harshad Mehta.
The accused had siphoned money from banks to invest in the stock market to manipulate prices. Sudhir Mehta was convicted for abetment of criminal breach of trust by a public servant and for criminal conspiracy. The bankers were convicted under various sections including forgery, cheating, criminal conspiracy and criminal breach of trust under the Prevention of Corruption Act of the Indian Penal Code.
The High Court granted bail to all the six convicts and allowed them to appeal against the judgment.
On November 25, Justice Shalini Phansalkar Joshi pronounced the judgment but the 236-page judgment was made available on the court’s website on Monday.
The scam made headline in 1992 and it was first of its kind involving millions of investors. Harshad Mehta and his coterie of investors increased prices of a particular stock triggering interest from small investors and for that, small investors lost their life’s savings.
The impact of the scam was so much that Bank of Karad and Metropolitan Co-operative Bank Limited went into liquidation. Harshad Mehta even accused the then Prime Minister PV Narsimha Rao that the PM had paid him Rs 1 crore in bribes.
According to the prosecution’s case, Suresh Babu of SBI and Ravikumar of National Housing Bank misappropriated the National Housing Bank’s fund by transferring the money to Harshad Mehta’s account by showing fake transactions of purchase of securities from the SBI.
Justice Pansalkar Josi said, “The offence, which is committed by them; especially, Ravikumar, Suresh Babu and Sitaraman is a grave and serious nature. The country has witnessed the repercussions of the said offense in the sense that the economy of the country was totally shattered on account of this scam.”
The CBI, the prosecuting agency probed 68 witnesses including officials of the State Bank of India, National Housing Bank and the Reserve Bank of India, some brokers, institutions whose shares were traded and three employees of Harshad Mehta.