CBI has booked the company, unidentified directors, public officials, and vendors under IPC sections related to criminal conspiracy, cheating, and provisions of the Prevention of Corruption Act. (Image: GTL website)

CBI files FIR against GTL for ₹4,760 crore bank fraud

The Central Bureau of Investigation (CBI) has filed an FIR against telecom infrastructure major GTL for allegedly diverting a substantial portion of a ₹4,760 crore loan availed from a consortium of banks led by IDBI Bank, officials said.

The agency has booked the company, unidentified directors, public officials, and vendors under IPC sections related to criminal conspiracy, cheating, and provisions of the Prevention of Corruption Act, following a preliminary inquiry that showed that GTL had fraudulently obtained various credit facilities from a consortium of banks, they said.

Conspiracy with vendors and bank officers

According to the FIR, the company allegedly diverted or siphoned off a majority of the loan amount in conspiracy with its vendors and unidentified bank officers, among others.
The FIR has alleged that GTL Limited was extending advances to vendors year on year without supply of material/goods, and eventually these advances were provisioned.

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“Various vendor companies were created and operated with the malafide intention of siphoning off the bank short term funds and other credit facilities in connivance with the borrower, i.e., GTL Limited,” the FIR has alleged.

The IDBI Bank had conducted a special audit of the company in 2011 and raised the issue of suspicious transactions with the vendors.

RBI directive to red flag the account

The Economic Offences unit of the agency has found that Reserve Bank of India (RBI) had warned IDBI Bank on April 1, 2016 to “red flag” the account and conduct a forensic audit, but in its response submitted two months later, the bank stated on behalf of the entire consortium lenders not to classify the account as Red Flag and also not to appoint a forensic auditor as it might delay the dues settlement.

The RBI reiterated its directive, following which a forensic audit was instituted on July 30, 2016.

The company was engaged in the business of providing telecom network deployment services, operations and maintenance services, professional services, network planning and design services, and energy management services to telecom operators in India and international markets.

Manoj Tirodkar and Global Holding Corporation Pvt Ltd (GHC) are the promoters of the company, the CBI has said.

Bogus vendor companies

The CBI has alleged that an amount of ₹1,213.97 crore is outstanding against four companies – Acuity Trading Pvt Ltd, Lenity Trading Pvt Ltd, Venerate Trading Pvt Ltd, and Vinamara Multitrading Pvt Ltd – which were given huge advances for supply of material from financial year 2009-10 to 2011-12, but supply orders were not completed.

“Eventually, Rs 1,213.97 crore was left outstanding towards these four vendors which was gradually provisioned till 2017-18,” the FIR alleged.

The CBI found that advances were given despite their meagre net worth and their recent incorporation.

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“The enquiry further revealed that all these vendor companies were incorporated within a short span of less than three months. And the Memorandum of Association (MoA) of these vendors of GTL Limited is exactly the same. There are same corrections in all the MoAs which clearly establishes that all the MoAs have been drafted by the same agency/source,” the FIR alleged.

During the inquiry, some of these vendors’ entities were examined.

“These directors had no knowledge about the supply made by them to GTL Limited, source of procurement by vendor companies, godown of vendor companies, where was the material being supplied. They also did not have any knowledge of the work that these vendor companies used to do,” it said.

The 2016 forensic audit of the company showed that GTL Limited had made substantial advances for the procurement of material to some of the vendors even though the purchases made from these parties were much lesser.

(With Agency inputs)

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