Indian Bank's ex-chief gets 1 year jail for cheating

A CBI special court here Wednesday sentenced M. Gopalakrishnan, former chairman-cum-managing director of Indian Bank, and another official to one-year jail terms for cheating and abusing their official position.

The Central Bureau of Investigation (CBI) special court also sentenced the bank's zonal manager A.V. Shanmugasundaram to one-year jail and gave a two-year jail term to S. Dhanasingh, managing director, Akilam Constructions. 

The special court imposed a total fine of Rs.450,000 on the three convicts, said a CBI statement.

The CBI registered the case against Gopalakrishnan and two other bank officials -- Shanmugasundaram and K. Sundaramurthy, proprietor of Allengar Foundations K. Anandan Pillai, and Dhanasingh alleging that during 1993-95 they entered into a conspiracy to cheat the bank.

Dhanasingh applied for grant of secured overdraft facility to the tune of Rs.5 crore to purchase 200 acres of land in Mahabalipuram for development and selling in the open market.

The accused bank officials ignored the procedures and sanctioned the overdraft facility to Akilam Constructions the same day.

According to the CBI, Gopalakrishnan by abusing his official position conveyed his approval for sanction without any verification and without waiting for the original proposal to come through the bank's credit division.

Based on the sanction letter, K. Sundaramurthy, chief manager at the bank's Alwarpet Branch here, released temporary overdraft facility of Rs.3.26 crore to Akilam Constructions against inadequate collateral security, the CBI said.

Akilam Constructions, in turn, transferred Rs.2.86 crore to Allengar Foundation whose proprietor K. Anandan Pillai settled his personal dues with Ind Bank Housing Ltd, the housing loan subsidiary of Indian Bank, the probe agency said.

During the trial, two accused Sundaramurthy and Pillai died and charges against them were abated, the CBI said.