Chennai firm under-scrutiny for duping 14 banks of Rs. 1,000cr
Bank frauds worth crores of rupees are now emerging every other day. Two days after a Rs. 4,000cr-fraud was reported in Mumbai, a Chennai firm is now under the scanner for looting 14 banks of more than Rs. 1,000cr. SBI was the first to report jewelry chain Kanishk Gold Pvt Ltd to the CBI. It took loans worth Rs. 824cr, then went untraceable.
How the banks' association with Kanishk started
According to SBI, Kanishk started taking bank loans from 2007. In 2008, SBI took over the loans, then worth Rs. 60cr, from ICICI. In 2011, PNB and BOI entered the consortium. The next year, led by SBI, they sanctioned metal gold loan (MGL) to Kanishk, enabling it to buy gold from nominated banks, or the open market using MGL credit or its current account.
14 banks loaned it amounts of up to Rs. 215cr
Throughout the years, the consortium kept increasing Kanishk's credits limits. Till now, SBI has loaned it Rs. 215cr, PNB Rs. 115cr, Union Bank Rs. 50cr, Syndicate Bank Rs. 50cr, BOI Rs. 45cr, IDBI Rs. 45cr, UCO Bank Rs. 40cr, and HDFC Rs. 25cr, among others.
The defaults started in March 2017
The first default happened in March'17, when Kanishk failed to pay interest to eight banks. By April, it stopped payments to all. Banks then discovered they couldn't contact Kanishk directors Bhoopesh Kumar Jain and wife Neeta. On May 25, 2017, when bankers visited, they found Kanishk's office, factory and showroom closed. The same day, Bhoopesh wrote to them admitting falsifying documents and removing stocks.
SBI seeks CBI help in probing Kanishk's status
According to a Madras Jewellers and Diamond Merchants Association representative, Kanishk had shut down in May'17 "since it couldn't cope with losses." SBI declared its account fraudulent in November; all others followed. In January, SBI wrote to CBI seeking help in locating the couple, who is believed to be staying in Mauritius. An FIR hasn't been filed yet. CBI will investigate the matter.
