The Directorate of Enforcement, Chennai, has frozen properties worth ₹48 crore of city-based Kanishk Gold Pvt Ltd under Prevention of Money Laundering Act (PMLA), in a bank fraud case.

Kanishk Gold manufactures gold jewellery and markets it under brand name ‘KRIZZ’ at their manufacturing unit at Pukkathurai village in Maduranthakam taluk of Kancheepuram district.

It was alleged that huge bank loans were obtained from a consortium of 14 banks with SBI as the lead bank for business purposes. Credit facilities were secured by securities such as raw materials, semi finished goods, finished goods, stores, spares, showing huge stocks. However it was later realised that the stock statements were fudged with the help of chartered accountants and on inspection by the banks in May 2017, it was found that no stocks were there and effectively all the operations came to a standstill, says a press release from ED.

Complaint by SBI

An FIR was registered based on a complaint by the General Manager of State Bank of India, Chennai, alleging offences of forgery, cheating and criminal conspiracy against the accused.

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 banks was to the tune of ₹824 crore as on December 31, 2017, the release said.

During investigations, falsification of records was admitted and it was stated that gap between the actual stock of gold and that reported to banks rose to 3,000 kg by 2017.

Simultaneous searches were conducted at the factory, residential premises of directors, and the business premises of CA.

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