CBI quizzes directors of Kanishk Gold in `824 cr loan default case
NEW DELHI: The Central Bureau of Investigation (CBI) on Thursday questioned Bhoopesh Jain and Neeta Jain - directors of Chennai-based Kanishk Gold Pvt Ltd - in connection with the Rs 824 crore loan default case. It has also issued Look out Circulars (LoC) against the promoters and directors of Kanishk Jewellers so that they don't flee the country.
The agency had registered a case of alleged loan fraud on Wednesday after a complaint from the State Bank of India (SBI) on behalf of the 14-bank consortium.
Apart from Bhoopesh and Neeta Jain, the CBI earlier booked Tejraj Achha, Ajay Kumar Jain and Sumit Kedia and some (unidentified) public servants.
The CBI carried out searches at the official and residential premises of promoters of Kanishk Gold as it launched probe in the Rs 824-crore loan fraud case, the officials said.
The company engaged in manufacturing gold jewellery which was marketed under the brand name 'Krizz' which were sold through distributors till 2014. But in 2015 it changed its business model to B2B (business-to-business) and started supplying to large retail jewellers, the SBI said in the complaint to the CBI.
The loan accounts of the company were taken over by the SBI from the ICICI in 2008, while its banking arrangement was converted into a multiple banking system in March 2011, it said.
The SBI alleged that the "fraud" is to the tune of Rs 824.15 crore, but the security available with it to cover the "loss" is only around Rs 156.65 crore.
In 2012, the consortium with SBI as lead bank, sanctioned granting of metal gold loan (MGL) to Kanishk. "Using this option, Kanishk would purchase gold in the form of bullions from nominated banks in the consortium or from the open market using credit under MGL or from its current account," said SBI.
SBI extended loans to the tune of Rs 215 crore, Punjab National Bank Rs 115 crore, Union Bank of India Rs 50 crore, Syndicate Bank Rs 50 crore, Bank of India Rs 45 crore, IDBI Bank Rs 45 crore, UCO Bank Rs 40 crore Tamilnad Mercantile Bank Rs 37 crore, Andhra Bank Rs 30 crore, Bank of Baroda Rs 30 crore, HDFC Bank Rs 25 crore, ICICI Bank Rs 25 crore, Central Bank of India Rs 20 crore and Corporation Bank Rs 20 crore.