Bengaluru: A special court for elected representatives in the city Thursday found former BJP minister Es En Krissnaiah Setty and three others, including manager of State Bank of Mysore (now State Bank of India), guilty of engaging in fraudulent activity and causing a loss of Rs 3.5 crore to the bank.
They were sentenced to three years of rigorous imprisonment and fined over Rs 4.2 lakh each. Setty and manager MTV Reddy were also fined Rs 1 lakh each for forgery. Reddy was fined another Rs 3.5 lakh for criminal breach of trust and under Prevention of Corruption Act.
However, the court suspended the sentence for one month, allowing the convicts to appeal. Landowner K Muniraju and GPA holder K Srinivas are the other two convicts.
The quartet were convicted under Indian Penal Code (IPC) Sections 120B (hatching criminal conspiracy), 420 (cheating), and 467 (forgery).
What is the case?
Setty and others were accused of fraudulently obtaining a loan of nearly Rs 7.2 crore from the KG Road branch of then State Bank of Mysore in 1993 using forged salary certificates. Of Rs 7.2 crore, slightly over Rs 3.5 crore was outstanding. CBI took up the case in 2008.
Senior IPS officer R Hitendra (ADGP-law and order), who was investigating officer then, said the complaint alleged that the accused worked together in a coordinated manner to obtain housing loans for various individuals through Sri Balaji Krupa Enterprises, owned by Setty.
“They did this by presenting falsified salary certificates from organisations such as ITI, BEML, BMTC, Bescom and KSRTC. The first accused, who served as branch manager then, is alleged to have collaborated with the other three individuals and approved loans amounting to Rs 7.2 crore. The loans were sanctioned based on these fraudulent documents,” Hitendra said.
“Prima facie, we discovered the loan was not only sanctioned against forged documents, but rules like visiting the spot and cross-checking credentials of the beneficiaries were not followed,” he added.
Interestingly, none of the suspects was arrested at that time as there was a stay from the high court. Meanwhile, Rs 3.6 crore was repaid to the bank in due time. However, the accused failed to repay the remaining Rs 3.5-crore loan, prompting the vigilance officer to file a police complaint.