Sitaraman who had helped Harshad Mehta as an SBI employee was convicted by the Bombay High Court, along with MS Srinavasan of State Bank of Saurashtra
On 23rd April 1992, when the Times of India first reported that Rs500 crore had been credited to the Big Bull’s (Harshad Mehta’s account) thanks to a missing SGL (Securities General Ledger) receipt, the man at the centre of it all was R Sitaraman, the manager. Over 23 years later, the Special Court set up for the expeditious trial of offences has finally delivered a verdict convicting R Sitaraman and a former chief manager of State Bank of India (SBI) and MS Srinivasan of State Bank of Saurashtra (SBS) in case 1 of 1996. Justice Roshan Dalvi, on her last day in office (30 October 2015) sentenced the two to four years rigorious imprisonment and a fine of Rs5 lakh each for criminal breach of trust and misappropriation of funds and under the Prevention of Corruption Act. The accused have also been asked to pay a compensation of Rs5 crore as compensation for embezzlement.
The order says, Srinivasan and Sitaraman are “exposed and uncovered to have caused tremendous loss aggregating to several hundreds of crores of rupees to SBS and SBI unbefitting their position as public servants responsible to the public exchequer. They are seen to have degraded themselves in misappropriating public property for illegal and criminal ends causing enormous monetary loss 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. The sentence against them must account for wanton economic loss to the country reflecting the deprecation for the subterfuge of accused A1 & A8 and the consequent conundrum caused to our country. They have not only corrupted themselves but corroded the country”.
Sucheta Dalal, managing editor of Moneylife had broken that story in 1992. She later co-authored a book on the huge securities scam of 1992, titled The Scam
, co-authored with Debashis Basu. The book starts with the desperate hunt for Mr Sitaraman by SBI’s vigilance chief at Palani near Coimbatore in Tamil Nadu, where he had gone for his son’s thread ceremony. This was after the Bank had discovered a gaping hole of Rs574 crore in the SGLs that it held.
The events that snowballed after the article was published engulfed the entire banking system and exposed the antiquated systems of the Reserve Bank of India (RBI) public debt office and dangers of brokers dominating the then powerful Bombay Stock Exchange (BSE).
Some 23 years later, the Court has been able to deliver the verdict on that case. The first paragraph of the judgement itself points to the pointlessness of long-delayed judgements. Of the 22 accused facing trial, three were discharged, three are dead and only two are convicted after 16 were given the benefit of doubt. Even here, the involvement of one of the two, is not very clear to those who followed and wrote about the case in details two decades ago.
Justice Roshan Dalvi’s judgement has brought the curtain down on one act of this saga; the final act will be played out in the Supreme Court, probably after another long delay. Ironically, the Special Court at the Bombay was set up under a new act for “expeditious” hearing of the scam cases. Of course, scams of far bigger magnitude have occurred in the country since the securities scam of 1992.