Dairy maker Kwality accused by Central Bureau of Investigation of bank loan fraud of Rs 1,400 crore
Kwality Limited, one of the country’s most popular dairy manufacturers, has been accused of defrauding a group of banks of Rs 1,400 crore in a fraud case filed by the CBI. The investigative agency closed the case after searches of eight locations, including Delhi, on Monday.
Those nominated by the CBI include the directors of Kwality, Sanjay Dhingra, Siddhant Gupta and Arun Srivastava. They were charged with cheating, forgery, criminal association and corruption by a consortium of 10 banks led by Bank of India, formed in 2012.
The CBI opened its investigation into a complaint from the Bank of India, which alleged that Kwality Ltd had taken out credit with the bank since 2010 but had started to default in early 2018. The account was classified as active. non-productive in August 2018, he mentioned.
“The forensic audit of the accounts showed that of the total sale of Rs 13,147.25 crore made by the company, only 7,107.23 crore was channeled through the consortium of banks. (Kwality) overestimated its financial statements by inflating its business operations and engaged in manipulation of accounts by making reverse entries, ”the bank said in its complaint.
The CBI said Kwality is accused of deceiving the banks by “embezzling bank funds, fictitious transactions with related parties, fabricated documents or receipts and forged account books” and creating false assets and liabilities.
“It was alleged in the complaint that said defendant had deceived the consortium led by Bank of India comprising Bank of India, Canara Bank, Bank of Baroda, Andhra Bank, Corporation Bank, IDBI, Central Bank of India, Dhanalaxmi Bank, Syndicate Bank to the tune of Rs.1400.62 basis, ”CBI spokesman RK Gaur said, according to Press Trust of India.
Besides Delhi, the CBI also carried out searches in Saharanpur and Bulandshahr in Uttar Pradesh, Ajmer in Rajasthan and Palwal in Haryana.
Kwality Ltd has been facing insolvency proceedings since December 2018. It owes approximately 1,900 crore rupees to creditors. The company was taken to bankruptcy court by global stock giant KKR. In 2016, Kwality raised Rs 520 crore from KKR India Financial Services through a structured finance transaction.