Rs 824.15 crore fraud: ED arrests Kanishk’s promoter

Probing the alleged Rs 824.15 crore cheating by Kanishk Gold Private Limited, the Enforcement Directorate (ED) arrested its promoter Bhoopesh Kumar Jain, under Prevention of Money Laundering Act on Friday.

ED sources said Jain appeared before investigators for interrogation after which he was arrested and remanded in custody till June 8. Last month, ED had attached Kanishk Gold’s fixed deposits of over Rs 143 crores.

The CBI had registered cases against the company, Jain, his wife Neeta Jain, partners Tejraj Achha, Ajay Kumar Jain and Sumit Kedia, and unknown public servants and others. This followed a complaint by SBI, Chennai, to the Bank Fraud and Securities Cell of CBI, Bengaluru, charging the company with cheating the consortium of 14 banks.

In its complaint, SBI had alleged that the firm, a Chennai-based gold jewellery manufacturer, was getting credit facilities from 14 banks led by SBI. The nature of the limit was working capital facility sanctioned to the tune of Rs 747 crore on the primary security of raw materials, semi-finished goods, finished goods, stores, spares. The company had also availed certain term loan limits from SBI.

However, an audit revealed that the stock statements were fudged with the help of chartered accountants, and loans were sanctioned without due diligence. Forensic audit for 2009 to 2017 period revealed falsification of records, fund diversion and disposal of the stocks.