
78 | Chapter 9
promoters. In order to create a camouage of
legal activity, such NBFCs may invest partially in
the stated objects of the company but a signicant
part of the funds are diverted.
In some cases, the diversion of funds is done in
a blatant manner, while in some other cases, inge-
nious ways to camouage the diversion take place.
One popular modus operandi is to show loans and
advances to a group companies or to a relatives of
the promoters who acquire property of a certain
value and after 1 or 2 years pay o the loans by
selling the same property to the main company at
a highly inated rate. In one case, it was seen that
a proper ...