Indian Bank ex-MD sentenced to 14-yr RI

CHENNAI: Former high profile Indian Bank chairman and managing director M Gopalakrishnan, was on Monday sentenced to 14 years rigorous imprisonment and fined Rs 70 lakh for causing wrongful losses to the public sector bank.

A CBI special court hearing the case, accused Mr Gopalakrishnan of causing losses of over Rs 8.67 crore to the bank between 1987-1992, by sanctioning loans to a company called PJ pipes and vessels, which wasn���t eligible for credit.

During this period, Mr Gopalakrishnan was the executive director of the bank.

He became the bank���s CMD in the mid-nineties, during which the bank posted record loss of Rs 1336 crore in 1995- 96, forcing the government to step in and infuse capital in the form of recapitilisation bonds of over Rs 3800 crore.

The court also found the bank���s former assistant general manager SV Shanmugasundaram guilty and sentenced him to 14 years of rigorous imprisonment, with a fine of Rs 80 lakh.

Three directors of PJ pipes and vessels- Geetha Vohra, Yeshpal Kumar and V Ramarao- who were also accused in the case, were acquitted, as there was insufficient proof.

The case against Mr Gopalakrishnan and Mr Shanmugasundaram was that they had abused their official position and conspired to help PJ pipes in lining up bank guarantees and term loan facilities in favour of the company.