Harshad Mehta's assets likely to fetch Rs 1,000 cr, says FinMin

The finance ministry today said the liquidation of the assets of late Harshad Mehta, who was convicted in the stock market scam of the 1990s, could fetch his creditors an additional Rs 800-1,000 crore.

The assets, likely to be liquidated by the Custodian and made available for distribution, comprise shares and immovable properties, apart from cash and fixed deposits.

Last week, the Supreme Court had upheld attachment of over Rs 1,000 crore of property belonging to the stock broker in Mumbai and elsewhere in Maharashtra.

“With this Supreme Court order, another round of distribution to the banks and financial institutions, who are the creditors of the Harshad Mehta Group, to the extent of an amount between Rs 800 crore and Rs 1,000 crore, has become a distinct possibility,” the finance ministry said in a statement today.

It said with this additional amount, nearly all the principal liabilities of the Harshad Mehta Group towards taxes, banks and financial institutions were expected to be met.

In March this year, Satish Loomba, Custodian (Trial of Offences Relating to Transactions in Securities), Ministry of Finance, had distributed Rs 2,200 crore to income tax authorities and State Bank of India.

In an order on May 6, the apex court had upheld the notifications by the Custodian regarding involvement of the mother and sister-in-law of Mehta in the securities scam of 1992. The court had dismissed their appeals against the order of the special court, which had confirmed their January 2007 notifications by the Custodian.

The court further said that in construing a statute of this nature, the courts should not adhere to a literal meaning but construe the same, keeping in view the larger public interest.

While accepting the arguments of the Custodian, the court ruled that he was justified in relying on the reports of the Janakiraman Committee, Joint Parliamentary Committee, the Inter-disciplinary Group and the reports of chartered accountants and other experts.

The Custodian had argued that the income of these female members in Mehta’s family had risen from near nil levels to tens and hundreds of crores of rupees in a short period without any asset base, through transactions involving huge amounts of money sourced from the stock broker.