Chennai Jeweller Accused Of Rs 800 Crore Bank Fraud, CBI Files Complaint

New Delhi: A case has been filed by the CBI against Chennai-based jeweller Kanishk Gold Pvt Ltd for allegedly cheating a consortium of 14 banks of Rs 824 crore, the probe agency's officers said on Wednesday. The consortium is led by State Bank of India.

The Central Bureau of Investigation (CBI) filed the case on a complaint from SBI on behalf of the consortium, the officers said.

The CBI has booked the company Kanishk Gold, its directors Bhupesh Kumar Jain, Neeta Jain, Tejraj Achha, Ajay Kumar Jain and Sumit Kedia, and some unidentified government officers.

The CBI carried out searches at officers and homes of the promoters of Kanishk Gold on Wednesday, officials said.

The company makes gold jewellery marketed under the brand 'Krizz', which were sold through distributors till 2014. In 2015, it changed its business model to B2B or business-to-business and started supplying to large retail jewellers, SBI said in the complaint to CBI.

The loan accounts of the company were taken over by SBI from ICICI Bank in 2008, while its banking arrangement was converted into a multiple banking system in March 2011, the complaint said.

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 Rs 156.65 crore.

CBI officials said they were in touch with the bank for a detailed information about the complaint. The complaint from SBI was made public before the agency could complete its searches, raising concerns in the CBI that it may not be able to gather crucial evidence, people familiar with the matter said. They said "some vested interests" may have leaked the complaint.

SBI alleged that Kanishk Gold "misrepresented and falsified" the records and financial statements of the company to show a "rosy picture" since 2009 to take credit. Kanishk Gold and its directors allegedly diverted the funds in a move that was against the interests of the bank, SBI said in the complaint.

The company's account was declared a fraud and non-performing asset in fiscal 2018 by several of the lenders, the complaint said.