CBI files case against GTL Ltd directors and bankers

The Central Bureau of Investigation (CBI) has registered a case against GTL Ltd, some unknown bankers and directors for allegedly deceiving a consortium of banks for an amount to the tune of Rs 4,760 crore by creating an array of shell firms to divert bank money.

To facilitate the fraud, the offenders allegedly created various vendor companies in collusion with GTL Ltd. Among the banks, ICICI Bank has an exposure of Rs 650 crore to GTL Ltd, Bank of India Rs 467 crore and Canara Bank has Rs 412 crore.

As per the central probe agency, the company fraudulently obtained loans from a bank consortium of around 24 lenders and subsequently siphoned off majority of the loan amount in conspiracy with vendors and some bank officials. GTL was extending advances to vendors year on year without supply of material and goods and eventually these advances were provisioned.

GTL is engaged in the business of providing telecom network deployment services, operations and maintenance services to telecom operators in India and international markets. Huge advances were given to the purported vendors and substantial amounts of such advance payments were routed back to GTL Ltd by the vendor entities after appropriating for purported marginal supply by the vendors.

Working capital funds were also used by GTL for buying fixed assets from vendors. The company allegedly made investments in various companies in purchasing their shares. The lenders have disbursed Rs 1,055 crore and Rs 1,970 crore in the financial year 2009-10 and 2010-11, respectively. Out of this loan amount, Rs 649 crore was invested in short-term mutual funds in FY 2009-10 and Rs 1,095 crore in FY 2010-11 immediately upon disbursement.