TN jeweller ‘dupes’ banks of Rs 824cr, sees CBI searches

CHENNAI: CBI on Wednesday conducted searches at the offices and houses of the owners of jewellery chain Kanishk in Chennai following a complaint from State Bank of India that the gold house had cheated 14 banks of Rs824 crore. A CBI spokesman said teams searched the premises of Bhoopesh Kumar Jain and his wife Neeta Jain, and the agency has registered a case.
In January, SBI sought the help of CBI to investigate jewellery chain Kanishk Gold Pvt Ltd for loan fraud of Rs 824 crore. The jeweller had borrowed from banks, inflating inventory and borrowed against the same asset more than once, SBI said in its letter. SBI was the lead bank in a consortium of 14 public and private sector lenders that gave loans to Kanishk.
In a letter dated January 25 to CBI, SBI charged Kanishk with “manipulating records, shutting shop overnight”. SBI was the first to declare the account fraudulent to RBI on November 11, 2017. By January, all other banks declared the account as fraudulent. SBI said the jeweller first defaulted in March 2017 in interest payments to eight banks.
By April 2017, Kanishk had stopped payments to all 14 banks. The bankers were unable to contact the promoter when it initiated its stock audit on April 5, 2017. On May 25, 2017, when the bankers visited Kanishk’s corporate office, factory and showroom, they found th- em shut.On the same day, Bhoopesh Jain wrote a letter to his bankers admitting falsification of records and removal of sto- cks secured as collateral to the lenders.
A representative from the Madras Jewellers and Diamond Merchants Association said the firm shut in May 2017 as “it couldn’t cope with the losses”.
(With inputs from Aparna Desikan)