New Delhi: Close on the heels of the Rs12,636 crore PNB fraud case, the Central Bureau of Investigation (CBI) has unearthed another bank fraud to the tune of Rs824.15 crore, involving Chennai-based jewellery chain Kanishk Gold Pvt. Ltd.

On 25 January—just four days before PNB filed a complaint with the agency against jewellers Nirav Modi and Mehul Choksi—a consortium of 14 banks, led by the State Bank of India (SBI), filed a complaint with the agency.

SBI was the first to declare the Kanishk Gold account fraudulent to the Reserve Bank of India (RBI) in November 2017, having extended loans of Rs215 crore to the jewellery chain.

By January, all other consortium members had declared the account fraudulent to the RBI, following which a complaint was registered with the CBI.

According to senior officials, who did not wish to be identified, Kanishk Gold had “procured the loans and then these loans were diverted elsewhere. The loans were not returned and when the banks realized that these loans had become non-performing assets (NPAs), the complaint was registered".

Kanishk, which has a registered office in Chennai’s T. Nagar, is owned by promoters and directors Bhoopesh Kumar Jain and his wife Neeta.

On Wednesday, a person familiar with the developments said, “Searches were conducted at the official and residential premises of the accused persons and Kanishk Gold Pvt. Ltd at various places in Chennai.

The case has been registered on a complaint from SBI on behalf of a consortium of 14 banks for cheating the consortium to an extent of Rs824.15 crore (approx)."

The person quoted above added that the CBI has established contact with the accused “and they have been asked to join investigation".

SBI, in its complaint to the agency, has named Kanishk Gold, its promoters and directors Bhoopesh Kumar Jain and Neeta Jain, Tejraj Achha who is a partner of Achha Associates, Ajay Kumar Jain who is a partner in Ajay and Co. (Crescent Court), Sumit Kedia who is a partner at Lunawath and Associates, as well as unnamed public servants.

Kanishk Gold did not answer calls.

The CBI on Wednesday said, “It was alleged that the company (Kanishk) was in the business of manufacturing gold jewellery which was marketed under a brand name and used to sell its jewellery to various retail jewellers. The company was getting credit facilities from 14 banks led by SBI."

The company had a working capital facility sanctioned to the tune of Rs747 crore. Other than this, the CBI added that Kanishk had also availed certain term loans from SBI.

“It was also alleged that there was falsification of records and the removal of the stocks which was secured to the lenders. It was further alleged that there were anomalies in the financial statements such as in the quantity of stock carried forward to the next year, anomaly in the sales register, diversion of funds and unusual transactions with the related parties," the CBI said.

E-mails and calls to SBI remained unanswered.

Shares of SBI tanked by 2% intraday on Wednesday, ending at Rs247.70, down 0.62%, on the BSE.

This scam comes in the wake of the Punjab National Bank fraud, where the CBI and the Enforcement Directorate (ED) have filed cases under the Prevention of Corruption Act and the Prevention of Money Laundering Act (PMLA), respectively. However, both Nirav Modi and Mehul Choksi have declined to join the investigation.

Remya Nair in Delhi and Gopika Gopakumar in Mumbai contributed to this story.

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