The Central Bureau of Investigation (CBI) issued a lookout circular against the promoters and directors of Kanishk Gold Private Limited (KGPL), including Bhoopesh Kumar Jain.
While officials of the State Bank of India (SBI), which led the consortium of 14 banks to lodge a complaint against KGPL, visited the office and residential premises of the suspects and pasted notices there, the CBI’s Banking Securities and Fraud Cell (BS & FC) examined Mr. Jain and his wife in Bengaluru after registering a case on charges of cheating, criminal conspiracy and forgery. Investigators also invoked provisions under the Prevention of Corruption Act, 1988.
The allegation is that KGPL, which is engaged in the business of manufacturing gold jewellery and selling its products to leading jewellery majors across the country, took loans from various banks.
Signs of sickness
After the company showed signs of sickness by not paying interests and evaded calls, the banks conducted joint inspections on its premises to realise that it had shut operations.
The consortium of banks launched an investigation by roping in Deloitte Touche Tohmatsu India to conduct a forensic audit of the company.
A preliminary report of the audit pointed to various irregularities such as diversion of funds, falsification of stock details and anomalies in the sales register.
It was detected that KGPL and its directors, in collusion with statutory auditors, misrepresented records with an intention to defraud the banks. They presented a rosy picture of the company since 2009 for the purpose of availing credit.
While the total loss caused to the banks was to the tune of ₹824.15 crore, the total realisable value of immovable properties, plant and machinery held as security by the banks was worth only ₹158.65 crore.
Amidst suspicion of money laundering since funds were allegedly transferred to unknown accounts in India and abroad, the Enforcement Directorate might step in for investigation, police sources added.
