Former CMD of Indian Bank jailed for three years

Chennai:

Former chairman and managing director of Indian Bank M Gopalakrishnan was sentenced to undergo three years rigorous imprisonment in a bank fraud case.

A Kantha Kumar, Principal Special Judge for CBI Cases, Chennai, convicted Gopalakrishnan, five officials  of Indian Bank and four others including M Varadarajulu of MVR Group for cheating Indian Bank in the sanction of Letter of Credit facility to the tune of Rs  2.5 crores each in favour of Anderson Industries International Ltd and Sathyam Chemicals Pvt Ltd, both sister concerns of MVR Group of companies of M Varadarajulu.

The Letter of credit was issued for taking delivery of the cashew nuts  which were already imported in the name of Maxwell Exim Private Ltd and MVR Industries respectively.

The Letter of Credit facilities were sanctioned by Gopalakrishnan, who was then chairman and managing director on September 30, 1995, without the receipt of regular proposals of the respective branches of Indian Bank at Nandanam and Saidapet and only on the basis of request letters. He sanctioned it without  any reports on the pre sanction assessments, credit worthiness, security aspects and source of repayment, CBI stated.

The Letter of Credit were opened not for importing cashew nuts, but for taking delivery of the already arrived cashew nuts at Tuticorin Port with mounting arrears of demurrage much before the opening of Letter of Credit. Both  the  companies  could not repay the dues to the bank due to this fraud.  Indian Bank sufferered a loss of Rs 4.97 cr.

CBI then had filed chargesheet against Gopalakrishnan the then officials of Indian Bank N Kumarasamy, Credit Monitoring Officer of Zonal Office, V. N. Balakrishnan, Regional Manager ( South), Srinivasa Raghavan, Senior Manager ( Credit), Regional Office, AR Arunachalam, Chief Manager, Nandanam Branch, P Vasantha Rajan and S Jayaraman, Chief Managers, Saidapet Branch,  Solaiappan, ( Approver), Zonal Manager, Chennai, M Varadarajulu, Principal Advisor of all companies under the MVR group , Venky Raman ( Approver ), CMD of Anderson Industries International, V Krishna Kumar, G. Sambasivam, C S Usha Devi, Directors of  Anderson Industries  International Ltd , K Sai Jagannathan, Director of Sathyam Chemicals, Anderson Industries  International and  Sathyam Chemicals.

Usha Devi is absconding and not available for trial and case against her is still pending. During the trial, Jayaraman expired and charges against him abated.

Apart from Gopalakrishnan, Sathyam Chemicals director K Sai Jagannathan was sentenced to undergo three years of Rigorous Imprisonment.

Kumarasamy, AR. Arunachalam, Sambasivam, M V Varadarajulu and Krishna Kumar were sentenced to undergo two years of rigorous imprisonment and Balakrishnan, Srinivasa Raghabvan and Vasantha Rahjan were sentenced to undergo one year of rigorous imprisonment. A fine of Rs1.35 lakh has also been imposed on them.