BOMBAY: The CBI told the special court of Justice S.M. Variava here that it has information from reliable sources that the accused in the stocks scam case have funneled huge sums of money out of the country into foreign banks,

The revelation was made in the course of an application asking that all the accused in the case be remanded to CBI custody for a further 15 days, Both the CBI’s application for fresh remand and the bail petition of the accused have been adjourned.

The CBI pointed out to the court that a floppy disk that it has recovered from the offices of one of the accused is expected to reveal further details. The investigating agency stated that the floppy disk is still to be decoded and that more information had to be gathered for which a further 15-day remand of all the accused was necessary.

The CBI also submitted a case diary to the court which details the progress made during the course of the investigations on a day-today basis. The CBI lawyer told the court that the case diary was proof enough of the investigations that had already been done and also reveals the investigations that have still to be done.

In its remand application the CBI has also stated that R. Sitaraman a deputy manager of SBI who is one of the accused, had disclosed during the course of investigations that five SGL (Securities General Ledger) forms had been forged. The CBI was able to locate the five SGL forms with the help of which the Harshad Mehta group obtained illegal funds to the extent of Rs 464 crore.

To further establish the bogus transactions the CBI had carried out raids on many banks which established the involvement of bank officials as well as Harshad Mehta, Ashwin Mehta, Sudhir Mehta and their employees Pankaj Shah and Atul Parikh.

The investigating agency submitted before the court that so far shares worth more than Rs 100 crore had been seized from Grow more and its associated concerns. It was also disclosed that C.L. Khemani, Deputy Managing Director of SBI, is in possession of assets worth more than Rs 40 lakh.

During the course of the CBI interrogation, C. Ravi Kumar and Suresh Babu, officials of the National Housing Bank, who are among the accused, revealed that most of the Bankers’ Receipts (BRs) and SGL forms issued by them to the Harshad Mehta group were not supported by securities or BRs and SGL forms from other banks. The officials of the SBI, according to the CBI, did not insist that the Harshad Mehta group produce securities to protest SBI money.

The agency told the court that such an enormous scam could not have taken place unless the bank officials and Harshad Mehta had conspired.

The investigating agency submitted before the court that the investigation has “many dimensions” and that the CBI requires considerable time to further interrogate and collect information, It also wanted a fresh remand to unearth the “well-designed plan to siphon out funds,” The investigating agency also pointed out that the accused persons are influential and that if they are realized they can tamper with evidence that has not yet been unearthed by the CBI. The CBI also fears that the accused persons might flee the country if they are granted bail.

The hearing of the remand application and the bail petition was adjourned since the defence could not conclude its arguments. But according to CBI sources even if bail is granted, Harshad Mehta and his brothers will be rearrested on the basis of the second FIR pertaining to the UCO Bank case.

Article extracted from this publication >> July 3, 1992