Bank Fraud

Court Sentenced Three Individuals to Jail in Rs 9.10 Crore Bank Fraud Case


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A special court at Rouse Avenue, Delhi, has sentenced three individuals in a significant bank fraud case involving a loss of Rs. 9.10 crore. The accused, including Alok Sharma, former Managing Director of the private firm M/s Equipment Conductor and Cables Ltd. (ECCL), Mashkoor Ahmed, former Senior Executive Director (Development) at the National Small Industries Corporation (NSIC), and B.L. Malhotra, former Executive Director at NSIC, have been sentenced to varying terms of imprisonment and fined a total of Rs. 3.22 crore.

Details of the Sentencing

  • Alok Sharma: The former Managing Director of ECCL was sentenced to seven years of rigorous imprisonment (RI) along with a fine of Rs. 1.10 crore.
  • Mashkoor Ahmed and B.L. Malhotra: Both former NSIC executives were sentenced to one year of imprisonment each and fined Rs. 1 lakh each.
  • M/s ECCL: The court also imposed a fine of Rs. 2.10 crore on the accused firm, with Rs. 2 crore of that amount to be paid as compensation to NSIC.

The Case Background

The Central Bureau of Investigation (CBI) had registered the case on March 20, 2003, against Alok Sharma, Mashkoor Ahmed, and others, following allegations of corruption and fraud.

The investigation revealed that ECCL, a small-scale industrial unit, had borrowed funds from NSIC under two schemes: the Raw Material Assistance Scheme and the Bill Discounting Scheme. Between 1994 and 1999, Alok Sharma, in criminal conspiracy with Mashkoor Ahmed, fraudulently availed credit facilities from NSIC. Despite ECCL’s increasing debt, Ahmed, in his official capacity, sanctioned multiple credit limits to the firm, totaling Rs. 5.90 crore. By March 31, 2001, the outstanding amount had escalated to Rs. 9.10 crore.

Fraudulent Practices Uncovered

The investigation further revealed that ECCL pledged shares worth Rs. 1.10 crore as security, which were non-transferable due to a lock-in period, making them invalid. The firm also executed fraudulent Powers of Attorney to discount bills from the Andhra Pradesh State Electricity Board (APSEB) and Uttar Pradesh State Electricity Board (UPSEB). ECCL misrepresented the outstanding bills from these boards, claiming amounts of Rs. 352.63 lakh and Rs. 138.47 lakh, respectively, when the actual outstanding amounts were either much lower or non-existent. The firm even withdrew the Power of Attorney from UPSEB and secured payments directly, causing significant financial losses to NSIC.

Conclusion of Investigation

The CBI concluded that ECCL had dishonestly availed undue financial advantages totaling Rs. 9.10 crore, resulting in a corresponding loss for NSIC. After completing the investigation, the CBI filed a chargesheet on July 1, 2005, leading to the conviction and sentencing of the accused.

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