CBI books Mumbai-based P&S Jewellery, directors in Rs 568 cr bank fraud
New Delhi: P&S Jewellery Limited on Thursday joined the club of gold and jewellery businesses that have been officially declared as "wilful defaulters" and allegedly defrauded multiple banks of the largest amounts. The Central Bureau of Investigation (CBI) has now registered a bank fraud case of Rs 568.52 crore against the Mumbai-based jewellery enterprise and its directors Paresh Chabildas Shah, Sahil Paresh Shah and Viraj Chetan Shah, officials here said on Thursday.
CBI sleuths also conducted searches at 13 premises belonging to the accused and the defaulting company in Mumbai, Lonavla and other places in Maharashtra from where officials claim incriminating documents have been recovered. Joining the likes of Forever Precious Jewellery and Demands and Winsome Diamonds, both promoted by Jatin Mehta, who has now fled India, this FIR by the CBI adds one more small/medium jeweller to the list of bank defaulters it has registered cases against.
The CBI, in its FIR, has alleged that Shah's P&S Jewellery had fraudulently availed cash credits to the tune of Rs 578.50 crore from a consortium of eight banks, including the Union Bank of India (consortium leader), State Bank of India, Andhra Bank, Bank of Baroda, Central Bank of India, Canara Bank, Vijaya Bank and Syndicate Bank by way of forging documents and using them as genuine.
Officials said unknown public servants, who might have had a role to play, will also be probed in the case and that the total fraud amount so far has come to around Rs 568.52 crore.
Interestingly, much like Jatin Mehta's company, which had claimed that his customers in the United Arab Emirates had not anticipated the turns of the gold market and as a result had not been able to pay their dues to them, which in turn resulted in Winsome Diamonds having to default on its loan payments; P&S Jewellery has also made this claim previously.
In fact, in August last year, the National Company Law Tribunal had liquidated Paresh Shah's company and the concerned Appellate Tribunal had in 2019 also dismissed their appeal. And documents from the NCLT proceedings have revealed that the company has a total default amount of around Rs 788.65 crore, with the Union Bank of India having the most exposure of Rs 313.57 crore. State Bank of India has an exposure of Rs 163.63 crore.
The jeweller's accounts were declared NPA in March 2015 and in 2017, two banks — Central Bank of India and Andhra Bank had sent detailed communications to the defaulting company, informing it that they had declared P&S Jewellery as a "wilful defaulter" based on "sufficient proof" and information that the loan amounts were siphoned off for purposes other than shown.
While P&S Jewellery had filed for bankruptcy under the Insolvency and Bankruptcy Code, all resolution plans had been rejected by the Committee of Creditors as they came nowhere near to recovering the default loan amounts. And according to the company's own admission in 2018 before the NCLT, 12,000 employees' jobs would be affected if the company were to be liquidated.
The NCLAT had dismissed P&S Jewellery's appeal to stay the earlier liquidation order in January this year.
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