ED arrests jeweller in bank fraud case

Agency registers cases under money laundering Act

The Enforcement Directorate (ED) officials arrested Sanjay Agarwal, managing partner of Ghanshyamdas Gems and Jewels, under the Prevention of Money Laundering Act (PMLA) 2002, in connection with a loan fraud case in which State Bank of India (SBI), Hyderabad, suffered a loss of `67 crore.

The agency registered cases under money laundering Act based on investigation by Central Bureau of

Investigation (CBI), Bank Securities and Fraud Branch, Bengaluru, under various sections of the IPC. Subsequently, the CBI registered another FIR against Sanjay Agarwal and others relating to fraudulently removing gold and jewellery hypothecated to the Punjab National Bank (PNB) against gold loan availed by his firm and thereby causing a loss of `31.97 crore to the PNB.

Investigation by the ED revealed that Sanjay Agarwal is the managing partner in Ghanshyamdas Gems and Jewels which is engaged in wholesale trading of gold. In 2010 and 2011, the accused fraudulently procured gold bullion from the SBI by producing fake and forged bank guarantees and covering letters purportedly issued by the PNB and sold the gold bullion in the local market to various jewellers and small traders in cash.

The cash generated was diverted to several other firms floated by Sanjay Agarwal in the name of his wife, brothers and his employees. Later, after default on the gold loan happened, the SBI found that the bank guarantees and letters were forged. On August 17 2011, Sanjay Agarwal and his brothers Ajay and Vinay removed the entire stock of gold and jewellery kept at their store in Abids, Hyderabad.

The stock was already hypothecated to the PNB against gold loan availed by the firm. Sanjay Agarwal was already lodged in Kolkata Jail in another ED case related to diversion of ‘duty-free export bound gold’ into the market. He was produced before a special court, Hyderabad.