OBC HAS FILED CRIMINAL CASES AGAINST SOME OF THE GTB CLIENTS
MODY
FOLLOWING NEWS HAVE APPEARED ON MONDAY 3RD OF FILED AS APPEARED ON
GOOGLE NEWS SITE TODAY.
http://pib.nic.in/release/release.asp?relid=6221
Oriental Bank of Commerce (OBC) in its due diligence exercise after the
amalgamation of the erstwhile Global Trust Bank Ltd. (EGTB) has come
across cases of borrowal accounts where serious financial improprieties
have been observed. Internal investigations have revealed that the Bank
has taken high credit exposures in certain accounts even exceeding
exposure norms prescribed by Reserve Bank of India. High degree of
imprudence in exercise of sanctioning powers have been observed where
the bank appears to have abetted certain group of borrowers to siphon
off funds through banking channel. The conduct of most of these
accounts reveal that deliberate attempts have been made to camouflage
the position of NPAs by making fresh sanctions in sister/allied
concerns including some front companies. On the basis of internal
investigation OBC has filed criminal complaints with the CBI in the
following cases :( i) In the case of M/s Unitel Software Ltd. for
having caused wrongful loss to the tune of Rs. 676.79 lakhs to the bank
in the matter of sanction, disbursal and utilization of the credit
facilities. The CBI Mumbai has registered a regular case under Section
120-B read with Section 409 and 420 of the Indian Penal Code vide case
No. 1/C/28/2004-BS&FC/LO. (ii) In the case of Shri Ashok Advani of M/s.
Business India Publications, Mumbai, the CBI has registered a regular
case No. 1/C/33-2004/BS&FC/LO under Section 120-B read with Section 409
and 420 IPC against Shri Ashok Advani and unnamed officials of the bank
for cheating the bank to the tune of Rs. 15 crores by obtaining credit
facilities on the basis of misrepresentation. It was falsely mentioned
in the process note that the account of M/s Business India was a new
one, whereas Business India was banking with erstwhile GTB since 1994
and had defaulted in payment of credit facilities sanctioned earlier.
(iii) In the case of M/s Petro Energy Products Co. Ltd. (PEPCO), the
Company cheated the erstwhile GTB to the tune of Rs. 78.41 crores at
Bandra, Mumbai Branch and Rs. 23.15 crores at the Chennai Branch. CBI
has registered a PE at Mumbai against M/s PEPCO and unnamed bank
officials vide case No. 1/C/31/2004-BS&FC/LO. (iv) In the case of M/s.
Shonk Technologies International Ltd. (STIL), a wrongful loss to the
tune of Rs. 38.49 crores was caused to the erstwhile GTB on the basis
of misrepresentations and diversion the funds for purposes other than
for which the loan was sanctioned. CBI has registered a PE vide case
No.1/ C/30/2004-BS&FC/LO.(v) In the case of M/s Pearl Distilleries
Ltd., CBI has registered a complaint at Bangalore for having caused
wrongful loss of Rs. 10.28 crores to the bank in the sanction and
disbursal and utilization of credit facilities vide case No.
1/C/32/2004-BS&FC/LO. Some other cases are also being examined and it
is likely that OBC will lodge further complaints with CBI in due
course.
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