The CBI has recorded a case against GTL Ltd, some unknown bankers and directors for allegedly defrauding a consortium of banks for an amount to the tune of £476 million by creating an array of shell firms to divert bank money.
According to the Central Bureau of Investigation, the company fraudulently obtained loans from a bank consortium of about 24 lenders and then conspired with vendors and some bank employees to syphon off the majority of the loan money.
Inquiries revealed that GTL was extending advances to vendors year on year without supply of material and goods. And eventually these advances were provisioned, the agency said.
The CBI said that the fraudsters conspired with GTL Ltd to form a number of vendor firms to further the crime. Of the banks, ICICI Bank has a £65 million exposure to GTL Ltd., Bank of India has £46.7 million exposure, and Canara Bank has a £41.2 million exposure.
The company received short-term loan amounts for a variety of commercial purposes by falsely representing that they would all be used for the specified purposes. However, the CBI claimed that immediately after disbursement, the majority of the loan cash was not used for the intended purpose.