Srinivasan and other accused started nearly 20 fictitious companies in the names of his friends and employees, and prepared bills in favour of those units from the sick mills already taken over by him. These bills were presented to a bank for discounting, and Rs 75 crore was siphoned off. Bill discounting is a process where future receivables are converted to cash immediately at a discount. His turnover with the bank was around Rs 250 crore. The money siphoned off was diverted into the accounts of other fictitious companies and withdrawn later, the IG said.
The accused had opened several bank accounts with forged signatures to facilitate these transactions. The police were acting on a complaint preferred by Karthikeyan with the district crime branch against Srinivasan and five others. Already, there are two cases against Srinivasan at the Karumathampatti police station. According to police, Srinivasan led a lavish life and invested the ill-gotten money he made in the film industry. He even made attempts to purchase a helicopter and take over some sick banks, Pramod Kumar said.