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CBI registers FIR in Rs 824 crore loan fraud by Kanishk Gold; carries out searches

State Bank of India

New Delhi: The Central Bureau of Investigation (CBI) has filed a case of alleged loan fraud to the tune of Rs 824.15 crore against Chennai-based Kanishk Gold Pvt Ltd. The case has been registered following a complaint from a 14-bank consortium led by the State Bank of India (SBI).

The central agency later carried out searches at the official and residential premises of promoters of Kanishk Gold Pvt Ltd as it began investigation in the Rs 824-crore loan fraud case. Kanishk is owned by promoters and directors Bhoopesh Kumar Jain and his wife Neeta Jain. The company engaged in manufacturing gold jewellery which was marketed under the brand name ‘Krizz’.

It sold through distributors till 2014 but changed business model to B2B (business-to-business) in 2015 supplying to large retail jewellers, the SBI said in the complaint to the CBI. The loan accounts of the company were taken over by the SBI from the ICICI in 2008. Its banking arrangement was converted into a multiple banking arrangement in March 2011.

In its complaint, SBI alleged that while Rs 824.15 crore have been defrauded from the consortium, the security available with it to cover the loss is only around Rs 156.65 crore.

Among the banks who lent money to Kanishk are: the SBI, PNB, Union Bank of India, Syndicate Bank, Bank of India, IDBI Bank, UCO Bank, Tamilnad Mercantile Bank, Andhra Bank, Bank of Baroda, HDFC Bank, ICICI Bank, Central Bank of India and Corporation Bank.

The SBI declared the account fraudulent to the RBI. The company’s account was declared fraud and non-performing asset (NPA) in 2017-18 by various lending banks. Kanishk Gold Pvt Ltd and its directors allegedly diverted the funds detrimental to the rights and interests of the bank, the bank said. The SBI has requested the agency to register a case against Kanishk Gold Pvt Ltd, its promoter director Bhoopesh Kumar Jain and others.

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