A special court here Thursday convicted broker Hiten Dalal and five others in the 1991-92 securities transactions scam, and sentenced them to two years in jail.
Their crime resulted in loss of people's confidence in the banking system and affected the country's economy, special judge Justice Shalini Phansalkar-Joshi said.
The court, set up in the Bombay High Court under the 'Trial of Offences Relating to Transactions in Securities Act, 1992', acquitted six others for lack of evidence.
Hiten Dalal, Kishan Kapadia, Sudhakar Ail, C S Raje, S Ramaswamy and Santosh Mulgaonkar were convicted for criminal conspiracy, criminal breach of trust and forgery of a valuable security under the IPC.
The court sentenced them to two years in jail, but suspended the sentence so that they can approach the Supreme Court in appeal. Under the special act, appeals in these cases are heard by the apex court.
The case pertains to securities transactions entered into by Standard Chartered Bank (SCB) through Dalal, its then broker, with various other "counter-party" banks such as Bank of Karad (BoK), Metropolitan Co-operative Bank (MCB) and HSBC Bank.
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CEO of Standard Chartered Bank lodged the case with the CBI in June 1992, alleging that the accused had duped the bank to the tune of Rs 1,239 crore.
The bank received neither the securities nor the bank receipts regarding their purchase from counter-party banks though SCB had paid for them, the CBI said in its charge sheet.
Between April 1991 to May 1992, the accused, through Hiten Dalal who acted as broker for SCB on one hand and with other banks including BOK, MCB and Andhra Bank on the other, syphoned off large amounts of funds from SCB by entering into fake securities transactions, the prosecution said.
The court said it was acquitting Bhupendra Dalal, Arvind Mohanlal, Tej Kumar Ruia, Krishnakant Vyas, Naresh Aggarwala and G N Hegde due to lack of evidence.
While the CBI had said there were 17 bogus transactions, the court said the charges were proved only in the case of two transactions worth Rs 30 crore.
While pronouncing the quantum of sentence, the court noted that the case had dragged on for more than 20 years, and during this time the accused had "suffered mentally and physically in their professional and also in their personal lives".
"To some extent these sufferings can be considered as deterrent also for others not to undertake or to repeat such acts which has serious impact on the economy of the nation," said Justice Phansalkar-Joshi.
The court also took into consideration advanced ages of the accused and their health.
"At the same time, it cannot be ignored that these transactions...have really affected the economy of the nation and also resulted into loss of public confidence in the Banking System," the court said.
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