Over two decades after the infamous stock market scandal or the ‘securities scam’ involving Harshad Mehta shook the nation, the Bombay High Court has convicted six persons in the case.
On November 25 this year, Justice Shalini Phansalkar-Joshi pronounced the judgement convicting among others, Sudhir Mehta, Harsahad Mehta’s brother.
The others convicted include three bankers Coodli Ravikumar, and SS Babu, former employees of the National Housing Bank, R Sitaraman, and an officer with the State Bank of India, stock broker Atul Parekh, and Mehta’s cousin Deepak.
While Sudhir has been sentenced only to six months’ imprisonment, Babu will serve three years in jail and the rest of the convicts will serve four years each.
Justice Phansalkar-Joshi dismissed all the convicts’ plea for leniency on health grounds observing that the offence was “grave and very serious in nature.”
“The country has witnessed the repercussions of the said offence in the sense that the economy of the country was totally shattered on account of this scam,” she said in the order.
Justice Phansalkar-Joshi however, granted bail to all the convicts and allowed them to appeal against the order in the Apex court.
In 1992, Harshad Mehta and the others were involved in a Rs700-crore scam in which they received huge sums from banks without any authorisation, and then invested it to artificially inflate prices of targeted stocks. Countless small investors lost their lives’ savings.
The case against Harshad Mehta was closed following his death on April 23, 2002 at the age of 47.
Sudhir Mehta was convicted only for abetment of criminal breach of trust by a public servant and for criminal conspiracy, while the remaining were convicted under various sections including cheating, forgery, criminal breach of trust and criminal conspiracy.
According to the CBI’s case, the bankers convicted in the case misappropriated National Housing Bank funds by transferring the money to the accounts of Harshad Mehta by showing fake transactions of purchase of securities from the State Bank of India.
CBI examined a total of 68 witnesses including officials of the National Housing Bank, the State Bank India, and the Reserve Bank of India, institutions whose shares were traded, a few brokers and three employees of Harshad Mehta.