Former manager, loans officer among five convicted in ₹2.88-crore bank fraud

The fraud happened between Januray 1998 and February 1999, and came to light in February 2000, after the bank’s chief vigilance officer flagged discrepancies in the bank’s ledgers

Mumbai: A special CBI court on Wednesday convicted five people, including the former branch manager and loans officer of the Oriental Bank of Commerce and the directors of two bogus firms in a ₹2.88-crore fraud case dating back to 1998–99 and sentenced them to two years of rigorous imprisonment.

Former manager, loans officer among five convicted in ₹2.88-crore bank fraud

Special Judge B.Y. Phad observed that the accused had “entered into a criminal conspiracy to cheat Oriental Bank of Commerce, Turbhe branch, by fraudulently issuing and accepting Letters of Credit without genuine underlying transactions, thereby causing wrongful loss to the bank and corresponding gain to themselves.”

According to the court, the offences occurred between January 1998 and February 1999, when the then branch manager, V R Pai and the then loans officer Sivasailam Hariharan conspired and sanctioned funds worth ₹2.88 crore to two bogus firms, Karan Cans Pvt Ltd and Zorawar Impex Pvt Ltd. They created fictitious accounts and fraudulently issued Letters of Credit to the firms, the judge ruled.

The court observed that Vinod Bhatia and Kunal Bhatia, through their company Karan Cans Pvt Ltd, “availed multiple Letters of Credit from the Turbhe branch in conspiracy with Pai and Hariharan, and also created two more bogus firms, M/s R. Prataprai & Company and M/s Zorawar Impex Pvt Ltd,with the help of their aides, Ravindra Pratap Rai Doshi and Mahesh Patel to route funds.”

“The evidence on record unequivocally establishes that the accused, in connivance with each other, created a chain of paper transactions to give an impression of legitimate trade, whereas in reality, the Letters of Credit were mere instruments to siphon off public funds,” the judgment stated.

The fraud came to light in February 2000, after the bank’s chief vigilance officer flagged discrepancies in the bank’s ledgers.

After examining 23 witnesses and over a thousand documents over a period of 17 years, the court convicted the defendants, including Pai, Hariharan, Vinod, Kunal, and Doshi. Another accused in the case, Mahesh Patel, died during the trial, leading to the abatement of proceedings against him in August 2022.

They have been sentenced to two years’ rigorous imprisonment and fined ₹20,000 each. The two companies—Karan Cans Pvt Ltd and Zorawar Impex Pvt Ltd—were each fined ₹5,000.