ED raids various premises linked to GTL Ltd. and GTL Infra in connection with bank fraud

On Wednesday, the Enforcement Directorate (ED) raided various premises linked to GTL Ltd. and GTL Infra in connection with a bank fraud case. GTL Ltd. and GTL Infra provide infrastructure, maintenance and support for telecom towers and telecom-related infrastructure. 

The ED registered a money laundering case against GTL Ltd., its Directors, unknown bank officials and unknown private persons based on a Central Bureau of Investigation (CBI) case registered against the firm and other accused in January this year. 

CBI registered the case against GTL Ltd. and others on charges of cheating, bank fraud and diversion of funds. 

GTL Ltd. had borrowed short-term loans from Consortium of banks headed by IDBI Bank between 2009 and 2012. The Forensic audit of the firm revealed that the firm had paid advances to the tune of over Rs 1142 crores to vendors for procurement of materials, but the audit revealed that the materials procured for the payments made to vendors were very less and the sum paid was multiple times higher. 

Further investigation into the payments made by the firm to vendors revealed that the vendors were explicitly created by GTL Ltd. management to siphon the loans borrowed from the consortium of banks. This modus operandi of GTL Ltd. management came to light, exposing that the funds diverted to created vendors were also redirected back to GTL Ltd. In contrast, the company showed losses in their balance sheets. 

Similarly, multiple such loans were diverted by GTL management, thus defrauding the banks.