Mumbai: A Special Court in Mumbai today sentenced former stock brokers Ketan Parekh, Hiten Dalal and five others to one-year rigorous imprisonment in connection with a transaction in the 1992 stock scam, involving  Canbank Financial Services Ltd, a unit of Canara Bank.

Justice V M Kanade of the Special Court (For Trial of Offences Relating to Transactions in Securities Act) also handed one-year rigorous imprisonment each to six others, including three top officials of Canfina and Canara Bank Mutual Fund.

Others convicted of criminal conspiracy and misappropriation of funds included stock brokers S K Jhaveri, Pallav Seth and Navinchandra Parekh as also Canfina`s former assistant vice presidents Sainath Mohan, M K Ashokkumar and former general manager of CBMF BR Acharya.

The court had acquitted former assistant vice president of Canfina N Balsubramaniam, former general manager of CBMF P J Subbarao and B V Shrinivasan of Vysya Bank.
 
The court, however, granted Parekh and all others bail till July 31 to appeal against the order. 

The Special Court had on March 14 convicted all eight of them in connection with the scam. They colluded to transfer money belonging to Canfina to accounts with Canbank Mutual Fund in Mumbai by default, and instead of returning the money to Bangalore-based Canfina, CBMF diverted it to the accounts of Parkeh and other stock brokers.

Justice Kanade held that Parekh, Dalal and Canfina officials had entered into a criminal conspiracy to "siphon off Rs47 crore".

Bangalore-based Canfina, a subsidiary of Canara Bank, suffered a total loss of Rs 47.7 crore in the scam.

Parekh defended the transactions saying  they had to transfer the shares, which they were handling, to Canfina. ''We transferred the shares and only Rs5 lakh worth of brokerage was lying with us in the whole transaction,''  he said.

He further said that his lawyers will appeal the verdict after getting a copy of the judgement.

Besides the 1992 securities scam, Parekh is also facing charges of involvement in the 2001 Ahmedabad-based Madhavpura Bank scam, in which the financial institution was duped of crores of rupees.

Parekh has been banned from operating in the stock market by the Securities and Exchange Board of India, for his role in manipulating the stock prices of various companies in 2000-01.