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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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