Maharashtra: ED files complaint against jewellery firm promoter, ex-MP, his son in bank fraud case

Representative Image. File Photo

The Enforcement Directorate (ED) has filed a prosecution complaint in Nagpur court against three jewellery firms and their promoters, including former MP Ishwarlal Jain and his son and former MLC Manish Jain, in connection with a multi-crore bank fraud case.

According to the PTI report, the central probe agency filed the prosecution complaint on July 26 before a special court in Nagpur hearing cases related to the Prevention of Money Laundering Act (PMLA).

According to the statement from ED on Monday, the court has taken cognisance of the prosecution complaint.

The prosecution complaint is against three jewellery firms, Rajmal Lakhichand Jewelers Pvt Ltd, R L Gold Pvt Ltd, and Manraj Jewelers Pvt Ltd and their promoters/directors/guarantors, Ishwarlal Jain, Manish Jain and others, reported PTI.

Ishwarlal Jain is a former treasurer of the undivided Nationalist Congress Party (NCP) and close aide of NCP (SP) chief Sharad Pawar. He is also a former Rajya Sabha member, while his son Manish Jain was a member of the Maharashtra legislative council.

The ED reportedly initiated the investigation on the basis of three FIRs registered by the Central Bureau of Investigation (CBI).

As per the FIR, the jewellery firms and their directors/promoters were involved in the offences of criminal conspiracy, cheating, forgery and criminal misconduct. They had purposefully stopped making payments on their loans and borrowings from the State Bank of India (SBI), causing a loss of Rs 352.49 crore (plus interest) to the bank, reported PTI.

The ED said that, as per its investigation, the promoters had submitted fake financials to avail themselves of the loans. In cooperation with the companies' auditors, they allegedly round-tripped transactions to inflate the financials and logged bogus sale and purchase transactions in the books of accounts of the firms to divert loan proceeds for real estate investments, read the statement, according to PTI.

According to the PTI report, it was also discovered that the promoters had deceitfully alienated and sold off parts of the mortgaged properties against these loans without the bank's approval. According to the ED, they destroyed documents that could have implicated the accused companies in order to prevent any scrutiny of the utilisation of the loan proceeds.

Last year, the ED reportedly conducted search operations at 13 official and residential premises of the Rajmal Lakhichand Group in Jalgaon, Nashik and Thane in Maharashtra and seized gold, silver and diamond jewellery/bullion worth Rs 24.36 crore and cash of Rs 1.121 crore along with various incriminating documents.

According to the news agency report, search and post-search investigative findings revealed fictitious stock/missing stock inventories of bullion and gold jewellery in books, use of shell companies, employment of dummy directors, it said.

The ED provisionally attached movable and immovable assets valued at Rs 315.60 crore in October last year. The attached assets include benami properties acquired by the Jains, the central agency said, reported PTI.

(With inputs from PTI)