CHENNAI: Former chairman and managing director of Indian Bank, M Gopalakrishnan and 16 others were convicted and sentenced to three years rigorous imprisonment in a 1998 bank fraud case.
The CBI eighth additional court on Tuesday was filled with people when judge A Thiruneelaprasad pronounced the order by convicting all the accused in the case for three years and imposing a total fine of Rs 11 lakh.
According to the prosecution, the case pertains to a total of 20 people and seven companies aided by M Gopalakrishnan, the then chairman of the Indian Bank, wherein borrowers-mostly small corporates and exporters from the State - were lent a sum of Rs 30 crore from six Indian Bank branches spanning across Chennai.
The seven companies- Ramraj Trading Co Pvt Ltd; Jaimatha Farm Dealers Pvt Ltd; Well Stores (Madras)Pvt Ltd; Indeco builders Pvt. Ltd; Sanjeevi Packaging and Abhinav Exmin Pvt Ltd, all borrowed funds by producing parcels of land as collateral and obtained `30 crore in all to construct a huge commercial complex near Kathipara in Guindy in 1996, said the charge sheet submitted by the CBI in the court. However, the money obtained was all funnelled to a (seventh) company named Sathyam Chemicals in collusion with the bank officials. In turn, the chemical company diverted the funds overseas, submitted the prosecution.
For two years, there was not a single activity in each of the accounts and the companies that obtained the loan, defaulted on the loan payments and declared as Non-Performing Asset by the bank, the prosecution submitted.
The CBI anti-corruption bureau that took up the case, filed a charge sheet in 1998 against 20 of them that included even the Chief General Manager, Zonal Manager and the Branch Manager of the bank. It is alleged that a total of eight officials in collusion with the companies, provided the loan. Judge A Thiruneelaprasad observed that the prosecution has proved the case beyond doubt.