The Central Bureau of Investigation on Wednesday filed an FIR against a Chennai-based Kanishk Gold Pvt Ltd (KGPL) for alleged loan fraud to the tune of Rs 824.15 crore by cheating a consortium of 14 banks.
The Central Bureau of Investigation on Wednesday filed an FIR against a Chennai-based Kanishk Gold Pvt Ltd (KGPL) for alleged loan fraud to the tune of Rs 824.15 crore by cheating a consortium of 14 banks led by SBI.
The case has been registered by the CBI on the complaint filed by the SBI on behalf of the 14 bank consortium on January 25.
The CBI has registered a case against the KGPL and its promoters directors Bhoopesh Kumar Jain and his wife Neeta Jain and auditors – Tejraj Achha, Ajay Kumar Jain and Sumit Kedia, and unknown others.
The CBI officials said that they carried out searches at the offices and the residential premises of the promoters of KGPL here as it began the probe in the bank fraud case. The official said that the accused persons have been contacted and asked to join the investigation.
The KGPL was engaged in the manufacturing of the gold jewellery which was marketed under the brand name of “Krizz”.
The loan accounts of the company were taken over by the SBI from the ICICI in 2008. Its banking arrangement was converted into multiple banking arrangements in March 2011 and subsequently it was converted into a consortium of banks in March 2012.
The SBI alleged that while the "fraud" is to the tune of Rs 824.15 crore, the security available with it to cover the "loss" is only around Rs 156.65 crore. The company's account was declared fraud and non-performing asset (NPA) in 2017-18 by lending banks, it alleged.
In the complaint, the SBI, the lead bank in the consortium, alleged that KGPL cheated the banks to the tune of Rs 824 crore by manipulating records and financial statements to avail credit facilities and diverting funds. It said that KGPL and its directors in the collision with the statutory auditors and others had “misrepresented and falsified” the records and financial statements of the company since 2009 showing a rosy picture for availing credit facilities from the bank to gain illegal profit.
CBI said that the nature of the limit was Working Capital facility sanctioned to the tune of Rs.747 crore. This apart, the company had also availed certain Term Loan limits from SBI. “It was also alleged that there was a falsification of records and the removal of the stocks which was secured to the lenders. It was further alleged that there were anomalies in the financial statements such as in the quantity of stock carried forward to the next year, an anomaly in the sales register, diversion of funds and unusual transactions with the related parties,” CBI said.
SBI said that the sign of sickness was noticed when the company delayed servicing interest for March 2017 to eight banks. In April, the company did not pay interest to all the member banks. When the stock audit was initiated on April 5 for the quarter March 2017, the promoter was unable for follow up. It said that when the consortium members visited the corporate office, factory and showrooms on May 27, no activity was found there. “On the same day, Bhoopesh Kumar Jain gave a letter admitting falsification of records since 2009 and removal of the stocks secured to the lenders,” it noted. On May 30, the banks conducted a joint inspection to find out that there was no stock in the factory and showrooms were locked.
A forensic audit conducted by the bank's consortium subsequently revealed that there are misrepresentation and falsification of records, diversion of funds and disposal of the stocks by the company. It observed that the statutory auditors and stock auditors had failed to record the deficiencies in the financial records and assets registers of the company which had adversely affected the bank’s interest.
As on December 31 last year, State Bank of India has an outstanding of Rs 240.46 crore, Punjab National Bank Rs 128.31 crore, Syndicate Bank Rs 54.94 crore, Union Bank of India Rs 53.68 crore, Bank of India Rs 46.20 crore, IDBI Bank Rs 49.13 crore, UCO Bank Rs 45.01crore Tamilnad Mercantile Bank Rs 41.37 crore, Andhra Bank Rs 32.75 crore, Bank of Baroda Rs 32.78 crore, HDFC Bank Rs 27.06 crore, ICICI Bank Rs 27.61 crore, Central Bank of India Rs 21.99 crore and Corporation Bank Rs 22.86 crore.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Gold")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}