Financial Daily from THE HINDU group of publications
Saturday, Jan 24, 2004
Government - Politics
Special Court clears Jayalalithaa in SPIC case
Our Legal Correspondent
SMILE SAYS IT ALL: Mr A.C. Muthiah, industrialist, coming out from the Special Court after being acquitted in the SPIC disinvestment case in Chennai on Friday. The court cleared the Tamil Nadu Chief Minister, Ms Jayalalithaa, and two former IAS officers of the charges of abuse of official power in the case. V. Ganesan
Chennai , Jan. 23
A SPECIAL Court on Friday cleared the Chief Minister, Ms J. Jayalalithaa, and two former IAS officers of the charges of abuse of official power in a case relating to the Government's renouncing its rights shares in Southern Petrochemical Industries Corporation.
The case was instituted by the former DMK Government in 1991-92.
The Special Judge I, Mr R. Rajamanickam, held that the prosecution by the Central Bureau of Investigation of the accused 1 (Ms Jayalalithaa), accused 2 (former Industries Secretary, Mr C. Ramachandran) and accused 3 (industrialist, Mr A.C. Muthiah) had not proved the charges against them beyond reasonable doubt.
The benefit of doubt was, therefore, given to the three accused. They were not found guilty.
According to the CBI, Ms Jayalalithaa and Mr Ramachandran allegedly abused their power to bring back late M.A. Chidambaram, industrialist, as Chairman of the joint sector Southern Petrochemical Industrial Corporation (SPIC).
Another allegation was that the transaction of disinvestment in the TIDCO's `zero conversion bond' caused a loss to the State Government.
Ms Jayalalithaa was present in the court when the 93-page judgment was read by the judge.
The judge, while referring to the prosecution witnesses on the charge of abuse of power by Ms Jayalalithaa and others, said that the transaction of sale of zero conversion bonds was concluded after in-depth study at various levels.
The transactions were transparent and the TIDCO management and the Departments of Industries and Finance and the Chief Secretary had taken a collective decision.
In fact, at that time, the share prices of various scrips had artificial boom and soon, thereafter, the prices crashed. TIDCO escaped from the market crash.
According to the annual report of TIDCO, the company made a profit of Rs 12.37 crore by renouncing the rights. The audit report had been approved by the Comptroller and Auditor General of India.
It had been proved, the judge said, that the sanction to file chargesheets against A1 and A2 was taken by the Government without the requisite approval of the Governor. An order issued by the Government to prosecute them was not proper and valid.
The judge said that it was clear that the petition of Dr Subramaniam Swamy was filed after 3 years of the transaction but he also had no personal knowledge about the transaction.
On the question of chairmanship of SPIC, the judge said that according to the deposition of the witnesses, SPIC had the right to nominate its chairman. The company's articles of association had clearly established that it had the authority to nominate the chairman. It was clear that neither the State Government nor TIDCO had any right to nominate the chairman of the joint sector venture.
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