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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
India's Central Bureau of Investigation (CBI) has arrested the chairman and two directors of a listed company in the Indian city of Ahmedabad for alleged frauds incorporating letters of credit (L/Cs).
The trio allegedly defrauded Andhra Bank of around US$4.7 million by submitting fake and forged documents in order to obtain L/Cs.
Searches
The three men arrested are the chairman and managing director of Vishal Exports Overseas Limited (VEOL), Subash Mehta, and his two sons, Pradeep and Deepak who are both directors of the company.
They were arrested after the CBI searched the company's business premises and the homes of the three men and uncovered various documents utilised in the alleged frauds.
The CBI was acting on a complaint lodged by Andhra Bank.
Allegations
The accused men allegedly managed to access funds and facilities - including L/Cs, bill discounting facilities and other credit facilities - from around 23 banks, between 2004 and 2006.
They managed to access these funds and facilities by using bogus and forged documents to the bank, according to the CBI.
Underlying transactions
The investigators also allege that the accused obtained L/Cs opened in favour of associate companies of VEOL.
However, the CBI says that these L/Cs had no underlying genuine business transactions related to them.
This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.