AGM sentenced 1 Year Jail for irregularities in Loan Sanction and Disbursement

In a 2008 loan fraud case involving Vijaya Bank and Roshan Electrical Pvt Ltd, a special CBI court has rendered its decision. On April 1, 2019, Vijaya Bank, a PSU bank with its headquarters in Bangalore, Karnataka, India, merged with Bank of Baroda. Anitha Mathias, a director of the company, was found guilty by the court of actively managing the company and being personally involved in the fraudulent operations. She was sentenced to three years in prison and fined Rs 1 crore.

The Assistant General Manager of Vijaya Bank's Goregaon branch, Shridhar Shetty, was also convicted by the court of conspiring to commit fraud. He was fined Rs 50,000 and given a one-year prison sentence. However, due to a lack of evidence, the court cleared Mahesh Kotian, the manager of Bharat Cooperative Bank, and closed the case against Maxima Mathias, Anitha's husband, who died during the trial. 

 The matter started when an anonymous allegation prompted Vijaya Bank to launch an internal investigation. Roshan Electrical has long-standing accounts with Bharat Cooperative Bank and had a cash credit limit of Rs 12 crore, according to the CBI's Economic Offences Wing.

Despite concerns, Shetty sanctioned Rs 20 crore as cash credit and Rs 10 lakh as bank guarantee, supported by a confidential report from Bharat Cooperative Bank that failed to mention key details such as four sister concerns of the firm and multiple dishonoured cheques. Investigators claimed that Shetty released Rs 21 crore—far more than the approved takeover amount of Rs 13.02 crore—without ensuring the transfer of a Rs 3 crore term deposit that was supposed to serve as security.

During the trial, both Anitha and Shetty argued that they were wrongly implicated, but the court rejected their claims. It held that Anitha was actively involved in the company’s operations and that Shetty knowingly violated procedures, making him part of the conspiracy. The court also observed that although the CBI did not fully investigate Kotian’s alleged role in suppressing facts, there was insufficient evidence to convict him. The verdict highlights serious procedural lapses and underscores the court’s intent to send a strong message against financial fraud and misuse of banking systems.