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Court releases Rs 400 crore from Harshad Mehta''s fundsnews
Nisha Das
06 October 2003


Mumbai: The special court hearing the cases related to the securities scam 1992 involving Harshad Mehta and others on Friday released Rs 400 crore from the custodian's funds as pending arrears to the Income-Tax (I-T) department. This puts an end to the 10-year-old legal battle of the I-T department for the Big Bull's arrears.

Confirming the development, senior IT officials said: "The State Bank of India [SBI] vehemently opposed the special court's move to release Rs 400 crore to the I-T department in the court." SBI had reportedly raised a claim of Rs 3,000 crore from the custodian.

Sources in the custodian's office said as per the laid-down rules, the first priority for availing of the share in the attached property of the notified parties goes to the I-T department under the act of various government departments. The second priority is given to banks and financial institutions (FIs).

Both the I-T department and SBI is now making all-out efforts to recover its funds from the custodian, who looks after the attached properties of the notified parties and is even ready to strike a compromise on the total interest valuation, which is over Rs 1,500 crore. SBI has already made provisions for Rs 700 crore in its books.

The bank is also looking for the share of the late Big Bull's real estate, which can be attached by the custodian to settle the dues of the bank. The I-T department had filed a suit way back in 1993 in the special court headed by Justice S N Variava. The custodian has already sold benami shares of Mehta worth Rs 750 crore.

The Associated Cement Company shares will the last in the benami lot after which the custodian will target the real estate properties of the tainted broker (See ''). According to custodian sources, the sale of the real estate is expected to fetch around Rs 100 crore. All these transactions are expected to be completed in the next seven to eight months.

The majority of the benami shares have been purchased by FIs and banks (like Life Insurance Corporation and State Bank of India). The FIs picked these shares at a discounted price compared to the current market price.

  also see : Holcim joins bid race to pick up Big Bull's 11% stake in ACC

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Court releases Rs 400 crore from Harshad Mehta''s funds