Kewal Krishan Kumar will stay in Enforcement Directorate custody until July 9. (File picture)
The Enforcement Directorate on Monday stated it has arrested Kewal Krishan Kumar, chairman and managing director (CMD) of Delhi-based Shakti Bhog Meals Restricted, in a cash laundering case linked to an alleged multi-crore financial institution mortgage fraud.
Kumar was arrested on Sunday right here and later produced earlier than a particular Prevention of Cash Laundering Act (PMLA) courtroom that despatched him to ED custody until July 9, the federal investigative company stated in a press release.
The company, previous to the arrest, additionally raided a minimum of 9 premises in Delhi and Haryana.
“Through the searches, numerous incriminating paperwork and digital evidences have been recovered,” it stated.
The ED case filed below felony sections of the PMLA is predicated on a CBI FIR that was filed early this yr in opposition to Shakti Bhog Meals Restricted for an alleged fraud of Rs 3,269 crore on a consortium of 10 banks led by the State Financial institution of India (SBI).
The CBI grievance got here after the SBI registered a grievance in opposition to the corporate.
In response to the SBI, the administrators allegedly falsified accounts and cast paperwork to siphon off public funds.
The 24-year-old firm, which is into manufacturing and promoting wheat, flour, rice, biscuits, cookies and many others., had grown organically because it ventured into food-related diversification over a decade with a turnover development of Rs 1,411 crore in 2008 to Rs 6,000 crore in 2014, the financial institution had stated.
The ED stated the “allegations in opposition to the accused embody diversion of funds from mortgage accounts by round-tripping via associated entities and siphoning of funds was being accomplished by means of suspicious sale/buy from numerous entities.”
The financial institution report back to the CBI stated the turnover development of the corporate got here to an abrupt halt in 2015 with the account turning right into a Non-Performing Asset (NPA) and it was finally declared a fraud in 2019.
The account turned an NPA on account of stock losses owing to a steep fall in paddy costs, under-utilisation of capital expenditure within the rice and paddy segments and a delay within the tie-up funds to tide over losses, an investigation report by the financial institution on employees accountability had famous in 2017.
A forensic audit accomplished by the bankers identified that the corporate, in its account books of economic yr 2015-16, confirmed that its stock price over Rs 3,000 crore obtained broken because of pests and was offered at considerably low costs.
This was contradictory to the inventory and receivable audit report, which confirmed that the corporate had a inventory of over Rs 3,500 crore in September 2015, its warehouses have been absolutely stocked and not one of the stock was out of date or gradual shifting, the financial institution had alleged in its grievance.
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