The Enforcement Directorate (ED) has frozen assets amounting to Rs 442.85 crore belonging to the erstwhile promoters of Kwality Limited. This is as part of a probe into a bank fraud case under the Prevention of Money Laundering Act.
The assets attached are a 12,000-square yard sprawling farmhouse in DLF Chattarpur, high-end residential flats in Vasant Vihar and Punjabi Bagh, and a few plots in Karnal and Mohali. These flats were allegedly possessed by the company’s erstwhile promoters, Siddhant Gupta and Sanjay Dhingra, via a series of dummy companies. Alarmingly enough, even the promoter’s driver and security guard had director roles in such companies.
The ED probe followed a First Information Report (FIR) filed by the CBI, charging Gupta and Dhingra with cheating banks. Kwality Ltd, which was famous for its dairy products, had allegedly manipulated accounts. According to the FIR, the firm falsified sales, purchases, and other accounts, finally cheating a group of banks of Rs 1,400.62 crore.
As per the ED, the former directors carried out massive fudging of the accounts of the company. They inflated revenues and made up fictitious debtors. Astonishingly, numerous transactions were accounted for without any physical movement of goods. This sophisticated scam involved operating dummy companies with dummy owners to siphon off bank funds.
The probe has exposed a sophisticated web of financial dishonesty. The money was not only siphoned but also layered to cover their sources. These were then channeled into different accounts, usually for uses that have nothing to do with the original banking arrangements.
In November last year, the ED searched 15 premises of the former promoters. They found Rs 1.3 crore in cash during these raids and also discovered material linking the promoters to several shell companies.
Some of the more surprising finds were expensive luxury vehicles like Porsche, Mercedes, and BMW models bought for around Rs 4 crore under benami companies. Demat accounts with a total investment of Rs 2.5 crore have also been seized.
The ED action on Kwality Ltd indicates the intensifying focus on corporate fraud in India. Further details will keep coming out, showing the scale of this fiscal scandal, as investigations continue.
By Express News Service
Leave a Reply