Comments
A special court here has convicted and awarded varying jail terms to five persons, including senior bank officials, in the 1992 securities scam.
Justice 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 Bank.
While the court sentenced Lakshminarayanan and Srinivasan, executive director and senior vice-president respectively of FFSL at that time, to imprisonment up to three years, the officials of ABFSL were sentenced to four years.
As per the prosecution’s case, FFSL, a private firm, was facing an acute cash crunch and was desperately in need of additional funds.
It, 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 FFSL.
ABFSL 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 possess.
The court, however, acquitted Gopal Shankar Iyer and P Chandrashekhar, two other officials of FFSL, and share broker Pallav Seth.
The 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 transactions.
“This special case is a fallout of the financial scam that rocked the economy of the nation in the era of Harshad S Mehta,” Justice Phansalkar-Joshi said.
“Their 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 said.
Justice 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 nation.
The court, however, suspended the sentence of all the convicts for four months to permit them to file their respective appeals in the Supreme Court.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.