CHENNAI: A contractor who mortgaged a government land in prime Anna Nagar and fraudulently got loans for Rs 2.08 crore was sentenced to five years rigorous imprisonment by a CBI special court here on Wednesday. The contractor S Muthiah, a relative of former AIADMK minister E Subbaiah, was given the land on lease by Tamil Nadu Slum Clearance Board to build and run an educational institute in 2002.
However, he did not build any institute, but instead mortgaged the land in two banks over five years and secured loans to run his business. He failed to repay the loans too.
The CBI booked the then chief manager of the Bank of Baroda M Kailasam on charges of colluding with Muthaiah. According to the special public prosecutor M V Dinakar, Muthiah from 2002 to 2006 colluded with bank officials and obtained the loan by mortgaging the government property, along with private property at Ashok Nagar, from Bank of Baroda and Repco Bank. He later defaulted the loans.
During investigation, the Anti-Corruption Branch of CBI found that Muthiah had obtained a letter from Kailasam, that he had been repaying the loan dues regularly. Based on this, V Ramasamy, the then Regional head of REPCO Bank, Alwarpet, also provided a loan of Rs 1.10 crore. During investigation, CBI found there were no property documents of Muthiah with REPCO Bank.
The agency in 2009 registered a case against Ramasamy, Kailasam and Muthiah alleging that the accused conspired and cheated the banks. S Jawahar, Judge for XI Special Court for CBI cases, Chennai said the prosecution had proved the charges against Kailasam and Muthiah. The court sentenced them to undergo rigorous imprisonment for five years and imposed a total fine of Rs 35 lakh. Ramasamy was acquitted.