
24 | Chapter 3
banks and nancial institutions, which provides
the opportunity for diversion of the funds by the
promoters/management.
The use of shell companies for siphoning o
loans obtained from banks and nancial institu-
tions is explained at length with cases studies in
the next chapter.
Providing Advances
Another modus operandi used by the rogue pro-
moters/management is by providing ‘advances’
to the front companies for purported supply of
certain goods. No supplies actually change hands.
There is no intention to actually recover the so-
called ‘advances’. The money is again routed
through a chain of front companies before either
withdr ...