OBC moves against 5 GTB clients

Oriental Bank of Commerce (OBC) has filed criminal complaints with the CBI against several companies for allegedly defrauding the erstwhile Global Trust Bank (GTB), which became sick and had to be merged with the Delhi-based PSU bank last year.

The bank has filed criminal complaints against five companies for alleged financial irregularities running into over Rs 172 crore. Criminal proceedings have been launched against Petro Energy Products Company (Pepco), Pearl Distilleries, Shonk Technologies, Unitel Software and Business India Publications, an official release said today.

Some other cases are also being examined, and OBC is likely to lodge further complaints with CBI in due course.

While carrying out the due dilligence after the merger of the ailing GTB with itself, OBC came across loan accounts where "serious financial improprieties" have been observed.

"Internal investigations have revealed that the bank (GTB) had taken high credit exposure in certain accounts even exceeding exposure norms prescribed by RBI," the release said.

The conduct of most of the accounts reveal that deliberate attempts have been made to camouflage the positions of non-performing assets by making fresh sanctions to allied concerns including some front
companies, it added.