Another banking fraud? SBI charges Chennai-based Kanishk Gold of duping 14 banks to the tune of Rs 1,000 cr: Report
Chennai-based Kanish Gold has a registered office in T Nagar in and is owned by promoters and directors Bhoopesh Kumar Jain and his wife Neeta Jain, says report
The State Bank of India (SBI), the largest state-owned lender in the country, has accused jewellery chain Kanishk Gold of cheating as many as 14 banks, including the Punjab National Bank (PNB), to the tune of around Rs 824 crore, according to this Times of India report. The loan fraud could exceed Rs 1,000 crore if the interest accrued is also added to that amount, the report said.
Chennai-based Kanishk Gold has a registered office in the T Nagar neighbourhood, and is owned by promoters and directors Bhoopesh Kumar Jain and his wife Neeta Jain, according to the Times of India report. The SBI has already sought help from the Central Bureau of Investigation (CBI), requesting the latter to probe Kanishk. The CBI has not filed an FIR as yet.
News agency IANS reported that unlike the scam involving diamond jeweller Nirav Modi and Mehul Choksi of the Gitanjali Group worth Rs 13,540 crore, in which Letters of Undertaking (LoUs) were used, the Kanishk Gold allegedly resorted to falsifying records and financial statements to get loans from the banks over a 10-year period beginning 2008.
The SBI tops the list with Rs 240 crore of loans followed by Punjab National Bank (PNB) (Rs 128 crore), Bank of India (Rs 46 crore), IDBI (Rs 49 crore), Syndicate Bank (Rs 54 crore), Union Bank (Rs 53 crore), Uco Bank (Rs 45 crore), Central Bank (Rs 22 crore), Corporation Bank (Rs 23 crore), Bank of Baroda (Rs 32 crore), Tamil Nadu Mercantile Bank (Rs 27 crore), HDFC (Rs 27 crore), ICICI Bank (Rs 27 crore) and Andhra Bank (Rs 32 crore), IANS reported on Tuesday.
The SBI claims the Chennai-based jeweller first defaulted in March 2017, on interest payments to eight member banks. It has also been alleged that Kanishk stopped payments to all 14 lenders by April 2017. "The bankers were unable to contact the promoter when it initiated its stock audit" on 5 April, 2017, the report said.
Bankers said that thus far they were unable to contact the husband and wife duo, reportedly living in Mauritius. The SBI, the report added, was the first among the 14 banks to bring up the matter and had informed the Reserve Bank of India (RBI) in November 2017. According to an SBI letter, Kanishk Gold had been extended loans since 2007.
In a complaint to the Central Bureau of Investigation (CBI) in January this year, the SBI cited a forensic audit conducted into the acounts of the company and found that the KGPL and its directors including Bhoopesh Kumar Jain and his wife Neeta Jain in collusion with the statuatory auditors had been misrepresenting and falsifying records with a clear criminal and malafide intent to cheat and defraud the banks, IANS report said.
The latest banking fraud comes a little over a month after the Rs 13,600 crore Punjab National Bank (PNB) fraud surfaced, on 14 February. Diamantair Nirav Modi and his uncle Mehul Choksi are the alleged masterminds of the PNB scam. The PNB scam sent shockwaves across the banking sector, which has already been affected by the NPA issue.
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