The Enforcement Directorate (ED) Chennai has frozen properties worth ₹48 crore belonging to M/s Kanishk Gold Private Limited (KPGL), Chennai under Prevention of Money Laundering Act (PMLA).
The firm was engaged in the business of manufacturing gold jewellery which was marketed under the brand name Krizz. The gold was manufactured at a unit at Natarajapuram Village, Pukkathurai Village, Maduranthagam Taluk, Kancheepuram.
ED had initiated investigations under the PMLA based on an FIR dated March 21, 2018 registered by the Central Bureau of Investigation- Bank Fraud and Securities Cell CBI (BF&SC), Bengaluru. The FIR was registered based on the complaint given by the General Manager of State Bank of India, Chennai, alleging offences of forgery, cheating and criminal conspiracy. It was alleged that bank loans were obtained from a consortium of 14 banks with SBI as the lead bank.
Credit facilities were secured using proof of raw materials, semi finished goods, finished goods, stores, spares, showing huge stocks. However it was later realized that stock statements were fudged with the help of chartered accountants. During an inspection by the banks in May 2017, it was found that no stocks were there, and all the operations effectively came to a standstill.
Later, a forensic audit was conducted to identify fraudulent financial reports, diversion of bank funds, siphoning of funds and asset stripping for the period 2009-2017. As per the forensic audit report, there are misrepresentation/falsification of records, diversion of funds and disposal of stocks by the company. The total loss caused to the banks due to falsification/misrepresentaion amounts to ₹824 crore as on December 31, 2017.
According to K.S.V.V. Prasad, Joint Director, ED Chennai, “During investigations under PMLA, 2002, falsification of records was admitted and it was stated that the stock gap between the actual and reported to banks has risen to 3,000 kg of gold by 2017.”
Simultaneous searches were conducted at the premises of factory, residences of directors, business premises of chartered accountants, and certain incriminating documents were recovered. During the search at the factory premises, on the reasonable belief that the land, buildings, plant and machinery available at the factory, in Pukkathurai village are related to the crime, they were frozen. ED officials said that further investigations are in progress.
