Chennai/New Delhi: The Enforcement Directorate has frozen properties worth Rs 48 crore of Chennai-based Kanishk Gold Pvt Ltd and others in connection with its ongoing probe in a multi-crore bank fraud, officials said on Tuesday.
The agency has frozen land, buildings, plant and machinery available at the factory in Pukkathurai village in Tamil Nadu under Prevention of Money Laundering Act (PMLA).
The ED initiated investigations of the case on the basis of he March 21 FIR registered by the Central Bureau of Investigation (CBI) against Kanishk Gold Private Ltd and others.
The firm, which is engaged in the business of manufacturing gold jewellery, is accused of defrauding a consortium of 14 banks, with State Bank of India as a lead bank, by obtaining Rs 824 crore loans for the business purposes.
It is alleged that credit facilities were taken with securities such as 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 charted accountants.
“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,” an ED statement said.
The agency said that forensic audit was conducted to identify fraudulent statements of financial reports, diversion of bank funds, siphoning of funds and asset stripping during the period from 2009 to 2017.
“But, the audit found that there was misrepresentation and falsification of records, diversion of funds and disposal of the stocks by the company which led to the total loss caused to the banks due to the fraud works worth Rs 824 crore outstanding as on December 31, 2017,” the ED statement said.
During investigations, ED found that 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 kgs of gold by 2017.
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