Bank Officials Convicted in 1999 Fraud Case

Mumbai, Oct 17 (PTI) A special CBI court here has sentenced five persons including two former officials of the Oriental Bank of Commerce (OBC) to two years in jail in a 1999 case of fraud.

The accused were charged with causing a loss of Rs 2.88 crore to the bank. The Central Bureau of Investigation (CBI) succeeded in proving all the charges against them, judge B Y Phad ruled in the order passed on October 15.

"The evidence establishes a coherent, systematic, and intentional criminal scheme...," said the order which became available on Friday.



The accused were found guilty of criminal conspiracy, cheating, falsification of accounts, and violations under the Prevention of Corruption Act.



Besides a two-year prison term, the court also imposed a fine of Rs 5,000 each on former bank officials V R Pai and Sivasailam Hariharan as well as proprietors of private firms Vinod Bhatia, Kunal Bhatia and Ravindra Joshi.


The accused conspired to provide a wrongful financial gain to Karan Cans Pvt Ltd in 1998-99, and caused a loss of Rs 2.88 crore to the bank, as per the CBI's case.

During the trial, public prosecutor C J Nandode examined 23 witnesses.


The offence revolved around the misuse of Letters of Credit (LCs). The two bank officials issued unrecorded LCs without registering them in the bank's issue register, and manipulated the bank's general ledger and liability vouchers to conceal the transactions, the CBI told the court.


Further, the accused improperly enhanced the value of LCs and granted unauthorized co-acceptance of bills. Karan Cans Pvt Ltd along with other associated firms and proprietorships like R Pratap Rai & Company used these manipulated LCs to siphon off funds from the bank, the prosecution said.