The Enforcement Directorate, Chennai Zone, has attached fixed deposits worth over ₹143 crore along with the interest accrued thereon in the case of ongoing investigations against the city-based Kanishk Gold Pvt. Ltd.

Kanishk Gold manufactured gold jewellery and marketed it under brand name ‘KRIZZ’. Based on a complaint received from the General Manager of SBI, Chennai, Bank Fraud and Securities Cell of CBI, Bengaluru, registered FIR against the company, its directors and auditors on March 21 and initiated investigations.

SBI as the leader of consortium of 14 banks stated that huge credit facilities were availed by the company from the consortium for business purposes on the primary security of raw materials, semi-finished goods, finished goods, stores, spares, showing huge stocks. Stock audit reported that many of the transactions could be only of paper transactions. Thus, it was realised that stock statements were fudged with the help of Charted Accountants and loans were sanctioned without due-diligence.

Misrepresentation/falsification of records, diversion of funds and disposal of the stocks by the company was reported in the forensic audit and the estimated loss to the banks due to the above fraud works out to the tune of ₹824 crore.

During investigations, it was noticed that around ₹300 crore was paid by KGPL to a jeweller’s account. However, forensic audit observed that there was no evidence of receipt of gold for said payments. The said account to which the money was credited was used for money-laundering purposes.

Fixed deposits valued at ₹143.58 crore available in the said bank account was attached provisionally under provisions of PMLA. Total properties frozen/attached in this case so far, stands at ₹191 crore. Further investigations are in progress, the release said.

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