Mumbai: Sudhir Mehta, brother of the “Big Bull” Harshad Mehta, and 5 others, including senior bank officials and stock brokers, were convicted by a special Mumbai court in connection with defrauding of National Housing Bank to the tune of over Rs700 crore.
The Judgement comes 24 years after the securities scam rocked BSE and other stock exchanges in 1992. Harshad Mehta was also an accused in this case but the case against him was abated after he passed away in 2002.
Justice Shalini Phansalkar-Joshi, on 25 November, convicted Harshad’s brother Sudhir Mehta, Harshad’s cousin and stock brother Deepak Mehta, the then NHB officials C Ravi Kumar and Suresh Babu, former SBI officer R Sitaraman and stock brother Atul Parekh.
The convicts were sentenced to jail terms ranging from six months to four years and fined collectively Rs11.95 lakh after they were found guilty under the Indian Penal Code for cheating, forgery and criminal breach of trust. They were also found guilty under the Prevention of Corruption Act.
However, the court acquitted three others, including Harshad’s cousin Hiten Mehta. The other two are stock brothers Pankaj Shah and Virendra Damani. They were given the benefit of doubt on all the charges faced by them.
The court suspended the sentence and fine for eight weeks to enable them approach the Supreme court as the convicts pleaded that the apex Court was already on a winter vacation and in view of the demonetisation situation it would be difficult for them to pay the fines.
In this case, the prosecuting agency, the Central Bureau of Investigation, argued that the accused had entered into conspiracy with an object to commit a criminal breach of trust by misappropriating funds of National Housing Bank with an intention to obtain valuables, securities and pecuniary advantage to accused Harshad Mehta without any public interest.
The CBI alleged that the bank officers had transferred the funds to Mehta’s account by showing fake transactions of purchase of securities from SBI by preparing forged documents with the help of stock brokers.
Ten cheques amounting to Rs700 crore were issued for these transactions, it said. The accused, however, had pleaded that they were following market practise and had not committed any criminal offence.