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Journalism of Courage
MUMBAI, SEPT 27: The special court of Justice M S Rane today convicted stock broker Harshad Mehta and three others of conspiring to divert Rs 38.97 cr of the Maruti Udyog Limited’s surplus funds to Mehta’s accounts during April-May 1989 to May 1991.
Today’s order is the first conviction for Harshad Mehta, considered the mastermind of the securities scam which was exposed in May 1992 and investigated by the CBI.
The court will hear arguments on quantum of sentence on Tuesday.
The others convicted are P K Manocha, MUL’s former Deputy Manager, Finance, Vinayak N Deosthali, ex-assistant manager, UCO Bank and R N Popli, officer of the ANZ Grindlays Bank, New Delhi. The second accused in the case, Ambuj Jain, also a former MUL executive, was given the benefit of the doubt and cleared of all charges.
While all four were convicted for offences under sections 120-B (conspiracy) read with 409, 467, 468 and 471 of the IPC, the two public servants, Manocha and Deosthali were also convicted for offences undersections of the Prevention of Corruption Act. Mehta is also convicted of the offence under section 403 of the IPC (criminal misappropriation), while Manocha and Popli are convicted under section 409, IPC, V N Deosthali is convicted for offences under section 467, 468 and 471 read with 467 and 468 of the IPC.
The CBI filed the chargesheet in December 1994, and the trial commenced on July 22, 1998.
The court found that Manocha had misused his official position to cause wrongful gain to Mehta. The court held him guilty of being part of the conspiracy by delivering 35 lakh units of Unit Trust of India valued at Rs. 4.99 crore to Mohan Khandelwal, Mehta’s attorney, against specific instructions of the MUL board.
The court also indicted Manocha for delivering a cheque for Rs 10.11 crore (drawn by MUL on Canara Bank in favour of ANZ Grindlays Bank) to Anuj Kalia, who was known to Manocha as an employee of Mehta.
The court convicted Deosthali for misuse of his official position to cause wrongful gain toMehta. The CBI had charged Deosthali of having written to MUL on Jan 23, 1991, to deliver 35 lakh UTI units to Mohan Khandelwal, attorney of Mehta. An amount of Rs 4.99 crore was credited to the MUL account in Bank of America (Delhi) by Mehta. MUL had borrowed this amount at a higher rate of interest for 32 days against physical delivery of the UTI units.
On the reverse side, when the principal and interest was returned by MUL, an account payee banker’s cheque from MUL’s account in Canara Bank, Delhi was given to Anuj Kalia, an employee of Mehta. This cheque, under instructions from Khandelwal was deposited into the account of Harshad Mehta in ANZ Grindlays, Delhi, and later transferred to Mehta’s account in the same bank in Bombay.
Though the cheque was an account payee cheque in the name of Grindlays Bank, R N Popli was accused of having credited the same into Mehta’s account in Delhi and then tranferred to Bombay. Mehta then asked ANZ Grindlays, Bombay for a bankers cheque for the transfer of theamount to his account in UCO Bank, Haman Street Branch, Bombay.
The court held Deosthali guilty of forging the document (purporting to be valuable security) to issue a BR dated March 13, 1991, for Rs 10.11 crore with an intent to make MUL believe that UCO Bank was holding 70 lakh units of Unit Trust of India of the face value Rs seven cr at Rs. 14.45 per unit which UCO Bank was to deliver to MUL.
