Ex-GTB chief, 2 clients chargesheeted by CBI

The Central Bureau of Investigation (CBI) has filed chargesheets against the former chairman of Global Trust Bank (GTB), Ramesh Gelli, Sridhar Subhashree and two of its corporate clients for fraud leading to the dissolution of the bank.

After the imposition of a moratorium, this is the first action taken in connection with the fraud. The case was referred to the CBI in 2006 by the Oriental Bank of Commerce, which had taken over GTB after its collapse.

The chargesheets filed with the CBI special court are based on departmental findings which highlighted that the fraud had resulted from the top management's complicity rather than wilful loan defaults in connivance with bank employees, as is the case in other bank frauds.

The CBI has filed chargesheets against two Chennai-based companies of the Balaji group "" Balaji Industrial Corporation and Balaji Hotels "" and Mumbai-based Beautiful group (proprietors of Leelavati hospitals).

The investigation was coordinated with the Reserve Bank of India, National Stock Exchange, Bombay Stock Exchange and the Securities and Exchange Board of India.

According to the investigation report, the promoters of the bank gave loans to certain companies from 1996 to 1999 and failed to provision them as bad debts or non-performing assets (NPAs) in accordance with Reserve Bank requirements.