The CBI has booked GTL Limited, which deals with telecom infrastructure planning and services, and its directors for allegedly siphoning off a “substantial portion” of ₹4,760 crore credit facilities availed from a consortium of banks led by IDBI.

The CBI in its FIR filed on January 21 alleged that GTL, promoted by Manoj Tirodkar and Global Holding Corporation Pvt Ltd as promoters, created a sham network of vendors to divert the bank loans on the pretext of giving them advances for works largely remaining on paper.

A forensic audit by NBS and Co revealed “that out of ₹1,397.97 crores outstanding from the vendors as on 31st March 2012, ₹1,141.94 crores given as advance to vendors pertain to 2010-11 and no materials have been received against such advances”.

The CBI has also alleged in its FIR that GTL Ltd availed loan facilities by “misrepresentation that all such loan amount shall be utilised for the purpose of business activity” of the company. But, soon after disbursement, majority of the loan amount was not utlised for the stated purpose. The forensic audit showed the firm, “cheated lenders and thereafter misappropriated the funds,” alleged the CBI.

Substantial amount of large advance payments to vendors remained outstanding, and a part of it was routed back to the GTL Ltd by them after holding back amount exhausted for purported marginal supply of items.

Put together, ₹1,213.97 crore alone was outstanding against four companies -- Acuity Trading Pvt Ltd, Lenit Trading Pvt Ltd, Venerate Trading Ltd and Vinamara Multitrading Pvt Ltd. Analysing the company’s fiscal data, the CBI asserted the “GTL Limited gave huge advances of ₹2,113.76 crore in FY10 against which material received was only of ₹65.33 crore”.

The CBI also said vendors were incorporated within 3 months and individually had meagre net worth. More revealing, as per the agency, the “Memorandum of Association of these vendors of GTL is exactly same, which clearly establishes that all the MoA’s have been drafted by the same agency/source”.

The CBI stated that “The Directors had no knowledge about the supply made by them to GTL Limited, source of procurement by the vendor companies, godown of the vendor companies, where was the material being supplied. They did not have any knowledge of the work that these vendor companies used to do”.

Another irregularity noticed was that working capital funds were used by the company for buying fixed assets from vendors. The fund was also used for investing in various companies by purchasing their shares.

The GTL got ₹1,055 crore in 2009-10 financial year and another ₹1,970 crore in the next financial year from the consortium of banks. Of this loan amount, ₹649 crore was invested in short-term mutual funds in 2009-10 and ₹1,095 crore in 2010-11. More than that, ₹135 crore was invested in fixed deposits in 2010-11.