Nirav Modi of TN in `824 cr bank fraud
Banks have been conned yet again, this time by a Chennai-based jeweller, Kanishk Gold. In the latest saga, a consortium of 14 banks led by the State Bank of India were defrauded of Rs 824 crore in the form of loans that have now been declared non-performing assets.
Moreover, it is feared that the Directors of Kanishk -Bhoopesh Kumar Jain and his wife Neeta -- may have fled the country.
Unlike the scam involving diamond jeweller Nirav Modi and Mehul Choksi of the Gitanjali Group, in which Letters of Undertaking were misused, Bhoopesh allegedly resorted to falsifying records and financial statements to procure loans over a 10 year period beginning 2008.
The SBI tops the list with Rs 240 crore of loans followed by the Punjab National Bank (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).
Hours after the story broke, the CBI got into the act and lodged a complaint.
In a complaint to the CBI in January this year, the SBI cited a forensic audit conducted into the accounts of the company which had revealed that Kanishk Gold and its directors, in collusion with the statutory auditors, had been misrepresenting and falsifying records to cheat and defraud the banks.
Not just that, there was removal of stocks secured to the lenders without the knowledge of the latter. There was thus criminal misappropriation of secured assets.
The forensic audit revealed that the statutory auditors and stock auditors had failed to record the deficiencies in the financial records and asset registers of the company.
It also revealed discrepancies in the form of over valuation of the stocks and incorrect quantity of stock being shown in the working records maintained by the company.
The total loss to the banks is Rs 824.15 crore, excluding the interest that has accrued on the bad loans. The security available with the SBI to cover the loss is to the tune of around Rs 158.65 crore, being the realisable value of the immovable properties, plant and machinery charged to the lenders.
The CBI will also be looking into the role of public servants during the course of investigation. Signs of sickness were noticed in the company when it delayed servicing interest for March 2017 in respect of eight member banks. The promoter was also inaccessible.