HYDERABAD: A special court here on Monday convicted 18 of the 35 accused persons in the sensational scholarship scam involving alleged embezzlement of funds worth Rs. 50 crore.

All the convicts were sentenced to 10-year imprisonment, except D. Swaroopa Rani who was handed down a five-year jail term. Ms. Rani is the wife of convict D. Shankar Rao, Accountant in Hyderabad District Social Welfare Office. Fines ranging from Rs. 10,000 to Rs. 50,000 were also imposed on all the convicts.

The Judge of the Special Court constituted to try the case of embezzlement of scholarships meant for students, T. Bhaktavatsalam, delivered the verdict around 11.30 a.m. even as several family members, relatives and friends of the accused waited outside the court with bated breath.

Two hours later, the judge announced the quantum of the sentence by calling each convict.

With policemen not allowing outsiders inside the court hall, confusion and anxiety gripped family members and relatives of the accused persons. When the verdict was announced, some of them broke down.

Loopholes

Investigators explained that loopholes in sanctioning and disbursal of scholarships for students helped the convicts to misappropriate the funds. As per the then system, every educational institution head — be it a college or school — would approach the District Social Welfare Officer (DSWO) concerned and submit a list of students requiring scholarships.

The DSWO would direct the Assistant Social Welfare Officer (ASWO) to verify the applications. The ASWO would go to the educational institution, physically verify the students, ascertain their identity and forward the applications to the DSWO who used to issue the sanction orders.

These orders are sent to the Pay and Accounts office and subsequently the cheques are issued in the names of the principals of colleges and headmasters of the schools. They would in turn deposit the cheques in the bank and distribute the money among the students.

Hyderabad Detective Department Inspector S. Sharath Kumar, who investigated the case, said R. Mothya Naik, Warden in Social Welfare Department, was familiar with the procedure of sanctioning scholarship by virtue of his job.

While he floated 17 bogus colleges and eight bogus schools, Shankar Rao floated another five fake colleges. An advocate K.V.L. Jayasimha too set up 13 fake colleges. All of them submitted applications for scholarships in the names of students and colleges that never existed and embezzled funds.

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