The Central Bureau of Investigation (CBI) registered a case of alleged loan fraud of Rs 824.15 crore committed by Chennai-based Kanishk Gold Pvt Ltd on a consortium of 14 banks led by the State Bank of India. The agency carried out searches on Thursday, 22 March, officials said.
The case has been registered by the CBI on a complaint from the SBI on behalf of the 14-bank consortium, they said.
The agency has booked the company Kanishk Gold Pvt Ltd, its promoter Director Bhoopesh Kumar Jain, Director Neeta Jain, Tejraj Achha, Ajay Kumar Jain and Sumit Kedia besides unidentified public servants.
The CBI carried out searches at the official and residential premises of promoters of Kanishk Gold Pvt Ltd as it launched a probe into the Rs 824-crore loan fraud case, the officials said.
The company engaged in manufacturing gold jewellery which was marketed under the brand name 'Krizz' and sold through distributors till 2014. But in 2015 it changed its business model to B2B (business-to-business) and started supplying to large retail jewellers, the SBI said in the complaint to the CBI.
The loan accounts of the company were taken over by the SBI from the ICICI in 2008, while its banking arrangement was converted into a multiple banking system in March 2011, it said.
The SBI alleged that the “fraud” is to the tune of Rs 824.15 crore, but the security available with it to cover the “loss” is only around Rs 156.65 crore.
CBI officials said the complaint has been received and the agency was in touch with the bank because of certain loopholes in the complaint which were to be rectified by the bank.
The complaint from the SBI came in the public domain before the agency could complete its searches raising fears in the CBI that it may not be able to grab hold of crucial documentary evidence, sources said.
They said "some vested interests" may have leaked the complaint but it is trying hard to do as much damage control as possible.
The bank has alleged that the company had “misrepresented and falsified” the records and financial statements of the company to show a “rosy picture” since 2009 to avail credit facilities from it.
Kanishk Gold Pvt Ltd and its directors allegedly diverted the funds detrimental to the rights and interests of the bank, it said. The company's account was declared fraudulent and a non-performing asset (NPA) in 2017-18 by various lending banks, it alleged.
(The Quint has given up the use of plastic plates and spoons. This Earth Hour, what will you #GiveUp to save the planet? Use the hashtag #GiveUp and tag @TheQuint to tell us.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)