News Update

CBI files FIR against GTL for cheating, bank fraud in Rs 4,760 Crore credit facilities

• ByStartupStory     |    January 27, 2023

According to officials, the CBI has filed a FIR against telecom infrastructure major GTL for allegedly diverting a significant portion of a Rs 4,760 crore loan obtained from a consortium of banks led by IDBI Bank.

Following a preliminary investigation that revealed GTL had fraudulently obtained various credit facilities from a consortium of banks, the agency charged the company, unidentified directors, public officials, and vendors under IPC sections related to criminal conspiracy, cheating, and provisions of the Prevention of Corruption Act. According to the FIR, the company allegedly diverted or syphoned off a large portion of the loan amount in collaboration with its vendors and unidentified bank officers, among others.

According to the FIR, GTL Limited extended advances to vendors year after year without the supply of material/goods, and these advances were eventually provisioned.

“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 borrower i.e. GTL Limited,” the FIR has alleged.  The IDBI Bank conducted a special audit of the company in 2011 and raised the issue of suspicious transactions with the vendors.

The agency’s Economic Offenses unit discovered that the 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 Flags” and also not to appoint a forensic auditor as it may delay dues settlement.

The RBI reiterated its directive, and on July 30, 2016, a forensic audit was launched. The company provided telecom network deployment services, operations and maintenance services, professional services, network planning and design services, and energy management services to Indian and International market telecom operators.

According to the CBI, the company’s promoters are Manoj Tirodkar and Global Holding Corporation Pvt Ltd (GHC).

The CBI claims that an amount of Rs.1,213.97 crore (86.84%) is owed to four companies—Acuity Trading Pvt Ltd, Lenity Trading Pvt Ltd, Venerate Trading Pvt Ltd, and Vinamara Multitrading Pvt Ltd—that were given large advances for material supply from 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 were gradually provisioned till 2017-18,” the FIR alleged. The CBI found that advances were given despite their meager net worth and their recent incorporation. “The inquiry further revealed that all these vendor companies were incorporated within a short span of fewer than three months. And the Memorandum of Association (MoA) of these vendors of GTL Limited is exactly the same. There are some corrections in all the MoA’s which clearly establish that all the MoA’s have been drafted by the same agency/source,” the FIR alleged. 

“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.

According to the company’s 2016 forensic audit, GTL Limited made significant advances for the procurement of material to some vendors, despite the fact that the purchases made from these parties were much lesser.

 

 

Follow Startup Story