STANDARD Chartered Bank, one of the foreign banks at the forefront of a securities scam that rocked India in April 1992, has been denied the right to examine the books of other parties involved in the scandal.
Justice Sam Variava, who heads the special court set up to settle claims arising from the scam, passed strictures against Standard Chartered, saying the bank was guilty at first sight of being an equal and willing party to the large scale diversion of funds into private pockets.
In his order, the judge rejected an application by Standard Chartered, seeking the court's permission to inspect the books of some of the involved parties from which the bank says it must recover funds worth 12.39 billion rupees (about HK$3.13 billion).
The total extent of the scam had exceeded 30 billion rupees, caused a drastic fall in stock market values across the board. It involved most foreign banks and some nationalised Indian banks, notably the State Bank of India.
While rejecting Standard Chartered's application, the judge observed that large irregular transactions, in which prominent bank personnel had been involved, had been the cause of the scam.
'Had the petitioners [Standard Chartered] chosen to abide by the norms and regulations [framed by the Reserve Bank of India], there would have been no fraud,' said Justice Variava.
