On Friday, the Enforcement Directorate arrested MD of Kanishk Gold Private Limited for money laundering.

MD of Kanishk Gold arrested Five things you need to know Image for representation
news Fraud Saturday, May 26, 2018 - 11:45

In yet another case of a jewellery major purportedly defrauding banks, Bhoopesh Kumar Jain, the Managing Director of Kanishk Gold Private Limited(KGPL) was arrested on charges of money laundering on Monday. The Chennai-based jeweller has been remanded in judicial custody till June 8.  

Here are five things you must know about the issue:

  1. The primary allegation against the popular jewellery chain is of defrauding a consortium of 14 private and nationalised banks by reportedly falsifying records in order to display an increased working capital. In January this year, State Bank of India filed a complaint with the CBI that the jewellery chain was guilty of forgery, cheating and criminal conspiracy to the tune of Rs 824.15 crores.

  2. Loans to the jewellery maker began in 2007 when it began operations. By 2012, the company entered into a consortium agreement with a combine of private and nationalised banks. KGPL was reportedly granted a metal gold loan using which it would buy bullions from nominated banks or from the open market.

  3. As early as May 2017, the banks' investigation revealed that the stocks against which credit was obtained by KGPL- goods and input materials- were non-existent with operations having come to a virtual halt.

  4. In March 2018, the CBI raided the properties of KGPL and its questioned its promoters Bhoopesh Kumar Jain and his wife Neeta Jain. According to a statement by the Enforcement Directorate, Jain was arrested over suspicions that he may attempt to manipulate facts in his favour. In its statement on Friday, the Enforcement Directorate also pointed out, “He has neither cooperated with the investigation nor has he revealed any true or factual information so far.”

  5. In April, assets worth Rs 48 crore belonging to KGPL were frozen by the Enforcement Directorate under the Prevention of Money Laundering Act in addition to attaching the jewellery maker's plant and production machinery worth Rs 143 crore.

Also read: Explainer: Why Nathella, one of Chennai's leading jewelers, is under the scanner again

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