CBI court sentences Indian bank ex-chief and six officials to one year RI

A CBI Special Court in Chennai yesterday sentenced M Gopalakrishnan, former Indian Bank chairman and managing director, and six former senior executives of the bank to rigorous imprisonment of a year in a bank fraud case registered in 1997.

The CBI alleged credit facilities in the form of Foreign Bill Purchase were allowed to Sathyam Foods Private Limited without proper appraisal of documents.

Gopalakrishnan and six other senior bank officials, allegedly abused their position and sanctioned credit to the company without adequate security.

The company further diverted the extended credit to another company, flouting all Reserve Bank of India guidelines, resulting in a total loss of Rs31.75 crore for the Muthialpet branch of the bank. The investigating agency, charge sheeted 15 persons for various offences including criminal conspiracy and cheating.

CBI special judge S Malathy, yesterday, found them guilty and awarded a sentence of a year of rigorous imprisonment, though the sentence would be in suspension for the accused to go in appeal.

This comes as the third instance of conviction for Gopalakrishnan, who was sentenced 14 years' rigorous imprisonment (RI) by the special CBI court in 2009 as also RI of one year in another case last May.

He is currently out on bail pending appeal and is still facing trial in a dozen other cases filed by the Central Bureau of Investigation in mid-1990s.

In the latest case, M Varadharajulu, a businessman and seven others of a private company were also awarded similar punishment for causing a loss of Rs31.75 crore to the bank.