Chennai: Skeletons about The Global Trust Bank Limited (GTB) are tumbling out. Oriental Bank of Commerce, with which GTB was merged, has lodged a complaint with the CBI about advances made by the latter that have serious financial improprieties.

According to Oriental Bank, internal investigations have revealed that GTB has taken high credit exposures in certain accounts. In some cases the exposures exceed the norms prescribed the Reserve Bank of India (RBI).

Oriental Bank, in its due diligence, has found a high degree of imprudence on the part of GTB officials in exercise of sanctioning powers. According to Oriental Bank, GTB 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 non performing assets (NPAs) by making fresh sanctions in sister or allied concerns including some front companies.

On the basis of internal investigations, Oriental Bank has filed criminal complaints with the CBI in the following cases:

( i) In the case of Unitel Software Limited for having caused wrongful loss to the tune of Rs676.79 lakh to the bank in the matter of sanction, disbursal and utilisation of the credit facilities.

(ii) The CBI has registered a case against Ashok Advani of Business India Publications, Mumbai, and unnamed officials of the erstwhile GTB for cheating the bank to the tune of Rs15 crore by obtaining credit facilities on the basis of misrepresentation. It was falsely mentioned in the process note that the account of Business India was a new one, whereas the publication had been banking with the erstwhile GTB since 1994 and had defaulted in repayment of credit facilities sanctioned earlier.

(iii) In the case of Petro Energy Products Co. Ltd., the company cheated GTB to the tune of Rs78.41 crore at Bandra, Mumbai Branch and Rs23.15 crore at the Chennai Branch.

(iv) In the case of Shonk Technologies International Ltd, a wrongful loss to the tune of Rs38.49 crore was caused to the erstwhile GTB on the basis of misrepresentations and diversion of funds for purposes other than for which the loan was sanctioned.

The CBI has registered a case against the above-mentioned companies.

In the case of Pearl Distilleries Ltd, CBI has registered a complaint at Bangalore for having caused wrongful loss of Rs10.28 crore to GTB in the sanction and disbursal and utilisation of credit facilities.

Some other cases are also being examined and it is likely that Oriental Bank will lodge further complaints with CBI in due course.

A finance ministry statement on the complaints filed by OBC said that some other cases were being examined and further complaints would be lodged with the CBI in due course.

OBC's move comes days after the finance minister, P Chidambaram, assured parliament during the recently-concluded winter session that criminal cases would be filed in matters relating to GTB shortly.

Stating that "serious financial improprieties" were revealed in the five accounts during the post-merger due-diligence conducted by OBC, the finance ministry said "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 finance ministry release, however, did not mention the names of the GTB officials who have allegedly colluded to cause loss to the bank.

OBC's investigations have revealed that GTB had taken high credit exposures in certain accounts, exceeding exposure norms prescribed by RBI.

"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," the release said.

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