23 years on, 2 convicted in Harshad Mehta scam

A special bench of the Bombay high court constituted to hear the 1992 Harshad Mehta stock market scam recently convicted two former bank officials for cheating, criminal breach of trust and misappropriation of public funds.

The court has sentenced them to undergo four years rigorous imprisonment. The court also directed them to pay a sum of Rs 5 crore as compensation for the losses caused by them and Rs 5 lakh each as compensation.

There were a total of 22 accused facing trial in the case, but three of them, including Harshad Mehta died during the trial and three others have been discharged in its order passed on October 29.

Justice Roshan Dalvi convicted M.S. Srinivasan, the then chief manager of Funds Management Cell (FMC) of the State Bank of Saurashtra (SBS) and R. Sitaraman, who was the then bank officer in the securities division of the State Bank of India (SBI). Out of the 22 accused, 14 were public servants from banks and financial institutions and eight were private brokers.

In her judgment, the judge termed the crime as ‘anti-national’ observing that the duo caused tremendous loss aggregating to several hundreds of crores to SBS and SBI unbefitting their position as public servants responsible to the public exchequer.

“Their acts can well be termed anti-national as such acts had caused a tremendous economic strain and drain upon the country resulting in the scam of 1992,” observed Justice Dalvi, adding that they have not only corrupted themselves, but corroded the country.

The court convicted the duo under various IPC sections for criminal breach of trust by a public servant and under the Prevention of Corruption Act for dishonestly and fraudulently misappropriating funds of SBS and SBI.