Nagpur court convicts ex-minister Kedar in multi-crore bank scam

The senior leader was accused of diverting bank funds to private entities for the purchase of government securities, leading to substantial financial losses for the bank

Nagpur: Former Maharashtra minister and Congress MLA from Saoner in Nagpur district Sunil Kedar was pronounced guilty in a ₹150-crore co-operative bank scam on Friday. The senior leader was accused of diverting bank funds to private entities for the purchase of government securities, leading to substantial financial losses for the bank.

Mumbai, India - Dec. 30, 2019: Sunil Kedar during the swearing in ceremony for Maharashtra cabinet expansion at Vidhan Bhavan in Mumbai, India, on Monday, December 30, 2019. (Photo by Anshuman Poyrekar/Hindustan Times) (Anshuman Poyrekar/HT Photo)

A special court here sentenced Kedar to five years of rigorous imprisonment and a fine of ₹12.50 lakh. Additional sessions judge Jyoti Peckhale-Purkar handed the same sentence and fine to five other accused, while three persons were acquitted due to lack of evidence. Failure to pay the fine could result in an additional year of imprisonment, said the court.

The case was more than two decades old and Kedar, chairman of the Nagpur District Central Cooperative Bank when the scam surfaced in 2002, was the prime accused. It was alleged that during his tenure, companies from Mumbai, Kolkata, and Ahmedabad purchased government bonds worth ₹125 crore using bank funds, which they failed to repay. The cooperative department auditor pegged the value of the scam at ₹150 crore in view of bank interests during the period.

Kishore Belle, the then deputy superintendent of the state criminal investigation department led the investigation, and the charge sheet was filed in court on November 22, 2002. Kedar was made the prime accused and other accused included the then general manager of the bank Ashok Choudhari, the then chief accountant Suresh Damodar Peshkar, bond broker Ketan Kantilal Seth, Subodh Chanddayal Bhandari, Nandkishore Shankarlal Trivedi, Amit Sitapati Verma, Mahendra Radheshyam Aggarwal, and Shriprakash Shantilal Poddar. Kedar and the 11 other accused faced charges under sections 406, 409, 468, 471, 120-B, and 34 of the IPC. In November 2019, the trial court finalised charges of criminal breach of trust, misappropriation, forgery, and criminal conspiracy.

The case against bond broker Sanjay Hariram Agarwal was subsequently stayed by the Bombay High Court while one of the accused, Kanan Vasant Mewala is still reportedly absconding.

Kedar was present with his counsel Deven Chauhan and other accused during Friday’s hearing, when the courtroom was filled with lawyers, media persons, police and curious onlookers. The bank’s former chief accountant Suresh Peshkar, Mahendra Radheshyam Aggarwal and Shriprakash Shantilal Poddar were acquitted owing to lack of evidence.

Fraud under guise of statutory requirement

Former Maharashtra minister and Congress MLA Sunil Kedar was accused of siphoning off ₹150 crore from the Nagpur District Central Cooperative Bank through five securities firms – Home Trade Securities and Giltedge Management from Mumbai; Indrani Merchants and Century Dealers from Kolkata; and Syndicate Management Services from Ahmedabad.

Among them, Home Trade Securities was given ₹94 crore to purchase government bonds (also called gilts), while the remaining amount was given to the four other firms for the same purpose. This was in keeping with RBI guidelines, which mandate that every cooperative bank must purchase gilts to maintain the statutory liquidity ratio.

It was alleged Kedar and the five securities firms did not actually purchase government securities, but instead siphoned off all the entire money. After the scam surfaced, Kedar and bank officials lodged an FIR with the Ganeshpeth police station, alleging that Home Trade Securities, Giltedge Management and others had cheated with the bank. But, the co-operative department approached Ganeshpeth police and lodged a counter-FIR in April 2002, after noticing that Kedar had siphoned off the money in connivance with the brokers and some bank officials. The police completed its probe and handed over the case to the criminal investigation department, which then arrested Kedar and former bank officials for embezzlement of funds.