Settlement in Harshad Mehta scam likely by mid-04

A final settlement in the 1991 Harshad Mehta scam may finally be in place by the middle of 2004, with the Custodian (of the assets of notified parties involved in the scam) doing the last lap of appointing chartered accountant firms to untangle the web of claims and counter claims.

According to sources in the custodian's office, around 20 chartered accountancy firms have been appointed to look into the books of account of various notified parties to verify the entries. The accountants have been given a March 2004 deadline to submit their reports.

Of the 29 companies connected with Harshad Mehta, reports on 27 accounts were submitted in December last year. In all, there were 60 notified parties, of which 11 including Ketan Parekh were notified in 2001.

In all, the custoodian is expecting to realise around Rs 1800 crore from the sale of attached propeties including shares and immovable properties.

After the submission of final reports, the Custodian will fill the proposed distribution of free assets with the Special Court. A source in custodian office said, "We want to finish off the matter as fast as possible and will file the distribution application of all the 60 notified parties together to the Special Court."

However, in a few cases such as Fairgrowth Financials, the Special Court has issued interim orders. Seventy five per cent of the total liability has been paid off, and the Income Tax Department has been paid the entire dues. In other cases too, the Custodian has cleared off a part of the liability to various claimants.

Meanwhile, the Supreme Court hearing on the stay of sale of assets of Harshad Mehta will come up for hearing by the end of this month. Metha's family had obtained a stay order from the Supreme Court in December 2003 on the sale of the real estate.

According to sources in the Custodian's office, nearly Rs 1500 crore has been recovered from sale of the attached properties, of which 85 per cent belonged to Harshad Mehta and associated companies.

The rest was with small notified parties. The Custodian expects to realise Rs 200 crore from the sale of properties.