The Enforcement Directorate (ED) Chennai on Friday arrested Bhoopesh Kumar Jain, the managing director of Kanishk Gold Private Limited (KPGL) for alleged money laundering. He was produced before a metropolitan magistrate court and remanded in judicial custody till June 8.
According to the ED, it was felt he could try to tamper with evidence and records “to manipulate the facts in favour of his cause.” The agency added Mr. Jain, booked under the Prevention of Money Laundering Act, had not cooperated with the investigation or revealed any information so far.
The CBI Bank Security and Fraud Cell had registered a case against Mr. Jain on charges of forgery, cheating and criminal conspiracy levelled against him by the General Manager of State Bank of India (SBI), Chennai. The complaint alleged that he had obtained huge loans from a consortium of 14 banks with SBI as the lead bank, for business purposes. Credit facilities are usually secured against raw materials, semi finished goods, finished goods, stores, spares and stocks. However it came to light that stock statements were fudged with the help of charted accountants. On inspection by the banks in May 2017, it was found that no stocks were there and effectively all operations of KPGL had come to a standstill.
According to ED, the total loss caused to the banks due to the fraud was around ₹824 crore as of December 2017.
In April, the ED froze land, building, plant and machinery worth ₹48 crore belonging to the company’s owners. They also attached fixed deposits worth ₹143 crore (along with interest accrued) .The cumulative value of the properties frozen/attached was ₹191 crore.
KGPL is a Chennai-based jewellery manufacturer, engaged in the business of manufacturing of gold jewellery which was marketed under the brand name ‘KRIZZ’.
