A CBI court on Wednesday convicted former Chairman and Managing Director of Indian Bank M Gopalakrishnan and two others in an 18-year-old cheating case, causing Rs 3 crore (Rs 30 million) 'wrongful loss' to the bank and sentenced him and another person to one year rigorous imprisonment.
CBI's Anti-Corruption Bureau in 1996 had registered a case against Gopalakrishnan, then CMD of Indian Bank, A V Shanmugasundaram, its zonal manager, K Sundaramurthy, Chief Manager of its Alwarpet branch, S Dhanasingh,Managing Director of city based Akilam Constructions Pvt, and K Anandan Pillai proprietor of Allengar Foundations, Chennai and Akilam Construction.
They were charge for hatching a criminal conspiracy between 1993 to 1995 to cheat the bank's Alwarpet Branch and sanctioned credit facilities of huge amounts to these companies without sufficient securities and by surpassing bank's guidelines and rules, a CBI release said.
Akilam Constructions applied for grant of Rs 5 crore (Rs 50 million) secured overdraft for purchase of 200 acres in Mahabalipuram to develop and sell them as farmland in the open market.
Despite shortcomings pointed out in the loan application, Sundaramurthy forwarded the proposal to the Regional Office, recommending sanctioning of the facilities.
As per guidelines such proposal sent by a branch to the Regional office would go to Zonal Office, from where it would be forwarded to Credit Division, Central Office and only thereafter be put
up to CMD.
However, Shanmugasundaram got a letter sent to Gopalakrishnan directly recommending the proposal to sanction of Rs 5 crore on the same day - August 28, 1995, it said.
Gopalakrishnan conveyed his approval for sanction without verification or waiting for the original proposal to come through the credit division, it said.
CBI said on the basis of the sanction letter Sundaramurthy released temporary Over Draft of Rs 3.26 crore (Rs 32.6 million) to Akilam Construction by accepting inadequate collateral security and by disregarding terms and conditions of sanction.
Dhanasingh, who availed credit facility for the amount, 'diverted' Rs 2.86 crore (Rs 28.6 million) out of it to the account of Allengar Foundation represented by Anandan Pillai without using the loan amount for the purpose sanctioned, who in turn used it to 'settle' dues with Ind Bank Housing Limited, it said.
Due to this, the bank sustained monetary loss of Rs 3.26 crore and Dhanasingh and Anandan Pillai obtained pecuniary advantage of the amount, it said, adding ACB filed a chargesheet under different sections of IPC and Prevention of Corruption Act, including criminal conspiracy and cheating.
On completion of trial, S Malathi, VIII Principal Special Judge for CBI Cases, Chennai, convicted and sentenced Gopalakrishnan and Shanmugasundaram to one year RI each and Dhanasingh to two years RI, the release said, adding a total fine of Rs 450,000 was imposed on them.
During the course of trial Sundaramurthy and Anandan Pillai passed away and charges against them were abated.
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CBI's Anti-Corruption Bureau in 1996 had registered a case against Gopalakrishnan, then CMD of Indian Bank, A V Shanmugasundaram, its zonal manager, K Sundaramurthy, Chief Manager of its Alwarpet branch, S Dhanasingh,Managing Director of city based Akilam Constructions Pvt, and K Anandan Pillai proprietor of Allengar Foundations, Chennai and Akilam Construction.