
In a major bank fraud case, the Special Judge for CBI cases at Rouse Avenue Court has sentenced three individuals, including the former Managing Director of a private firm, to prison terms ranging from 1 to 7 years. Along with their imprisonment, the court also imposed a total fine of Rs. 3.22 crore.
The convicted individuals include:
- Sh. Alok Sharma, the then Managing Director of M/s Equipment Conductor and Cables Ltd. (ECCL), who was sentenced to 7 years of rigorous imprisonment (RI) and fined Rs. 1.10 crore.
- Sh. Mashkoor Ahmed, the then Senior Executive Director (Development) of the National Small Industries Corporation (NSIC), and Sh. B.L. Malhotra, the then Executive Director of NSIC, who were both sentenced to 1 year in prison with a fine of Rs. 1 lakh each.
In addition, the court imposed a fine of Rs. 2.10 crore on ECCL, out of which Rs. 2 crore is to be paid to NSIC as compensation for the losses incurred.
Background of the Case
The case stems from a complaint filed by the CBI on March 20, 2003, against Sh. Mashkoor Ahmed, Sh. Alok Sharma, and other unknown individuals on charges of corruption and fraud. The investigation revealed that between 1994 and 1999, ECCL, a Small-Scale Industrial Unit (SSI), fraudulently availed credit facilities from NSIC under two schemes – the Raw Material Assistance Scheme and the Bill Discounting Scheme.
Sh. Alok Sharma, in conspiracy with Sh. Mashkoor Ahmed, misused his position to get multiple credit limits sanctioned for ECCL. Despite the firm’s increasing debt, they managed to secure funds totaling Rs. 5.90 crores, which further escalated to Rs. 9.10 crores by March 31, 2001.
Fraudulent Activities by ECCL
The investigation revealed multiple instances of dishonesty by ECCL, including the pledge of shares worth Rs. 1.10 crore as security, even though these shares were non-transferable due to a lock-in period. Additionally, the firm used 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 amounts from APSEB and UPSEB, claiming them to be Rs. 352.63 lakhs and Rs. 138.47 lakhs, respectively, when the actual amounts were much lower or nonexistent. The company further withdrew the Power of Attorney from UPSEB, secured payments directly, and caused significant financial losses to NSIC.
Outcome of the Investigation
The investigation revealed that ECCL fraudulently availed benefits worth Rs. 9.10 crores, resulting in corresponding losses for NSIC. The CBI completed its investigation and filed charges on July 1, 2005, leading to the sentencing of the accused by the court.