The CBI had started its investigations into a complaint from the Bank of India.
New Delhi:
Kwality Limited, one of the most popular dairy manufacturers in the country, has been accused of defrauding a group of banks out of 1.4 billion rupees in a fraud case brought by the CBI. The investigating agency shelved the case after searches in eight locations, including Delhi today.
Those appointed by the CBI include the directors of Kwality, Sanjay Dhingra, Siddhant Gupta and Arun Srivastava. They have been accused of fraud, forgery, criminal conspiracy and corruption by a consortium of 10 banks led by Bank of India, formed in 2012.
The CBI began its investigations into a complaint from the Bank of India, which alleged that Kwality Ltd had taken credit from the bank since 2010, but began to default in early 2018. The account was classified as a non-performing asset in August 2018, said.
“The forensic audit of the accounts showed that of the total sale of 13,147.25 million rupees made by the company, only 7,107.23 million rupees were channeled through the consortium of banks. (Kwality) exaggerated its financial statements by inflating their commercial operations and account manipulation was allowed by making reverse entries, “the bank said in its complaint.
The CBI said Kwality is accused of misleading banks by “diverting bank funds, bogus related party transactions, fabricated documents or receipts, and counterfeit books of accounts” and creating bogus assets and liabilities.
“The complaint alleges that said defendant had defrauded the consortium led by the Bank of India, which includes Bank of India, Canara Bank, Bank of Baroda, Andhra Bank, Corporation Bank, IDBI, Central Bank of India, Dhanalaxmi Bank, Syndicate Bank for a sum of Rs. 1400.62 core, “CBI spokesman RK Gaur said, according to Press Trust of India.
In addition to Delhi, the CBI also carried out searches in Saharanpur and Bulandshahr in Uttar Pradesh, Ajmer in Rajasthan and Palwal in Haryana.
Kwality Ltd, once one of the oldest and most popular ice cream factories in India, has been facing insolvency proceedings since December 2018. It owes around Rs 1.9 billion to creditors. The company was dragged into bankruptcy court by global stock giant KKR. In 2016, Kwality had raised Rs 520 crore from KKR India Financial Services through a structured finance transaction.
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