India's Central Bureau of Investigation (CBI) has filed charges in a Mumbai court against a director of a Gujarat-based private telecoms company and several bank officials in a scam involving letters of credit (L/Cs).

The scam caused a consortium of State Bank of India (SBI), Vijaya Bank and Canara Bank losses of around $19m.

Credit facilities

Charges have been brought against the director of Click Telecom, Sunil Kakkad, and others after an investigation was launched following a complaint from the banks.

Investigations revealed that the company was extended several facilities, including cash, credit and non-fund based limits.

Fictitious purchases

But L/Cs obtained to purchase machinery were opened in favour of associate companies whereas no machinery was actually delivered.

The L/Cs were then discounted and the funds siphoned off according to the CBI.

The CBI's chargesheet names several SBI bank officials as well as Kakkad as alleged perpetrators of the scam.

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