CBI Books Kwality For Rs 1,400 Crore Bank Loan Fraud

New Delhi: The CBI has filed a fraud case against Kwality Limited, one of the country’s most popular dairy product makers, for allegedly cheating a group of banks of Rs 1,400 crore.

The investigating agency filed the case after searches at eight locations including Delhi on Monday.

Those named by the CBI include Kwality’s directors Sanjay Dhingra, Siddhant Gupta and Arun Srivastava. They have been charged with cheating, forgery, criminal conspiracy and corruption by a consortium of 10 banks led by Bank of India, NDTV reported.

The CBI started its investigations on a complaint by Bank of India, which alleged that Kwality Ltd had taken credit from the bank since 2010 but started defaulting on payments in early 2018. The account was classified as a non-performing asset in August 2018, it said.

“The forensic audit of the accounts showed that out of the total sale of Rs 13,147.25 crore made by the company, only Rs 7,107.23 crore were routed through the consortium of banks. (Kwality) overstated its financial statements by bloating its business operations and indulged in manipulation of accounts by making reverse entries,” the bank said in its complaint.

A CBI spokesman said, “It was alleged in the complaint that the said accused had cheated the Bank of India-led consortium 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 core,”

Besides Delhi, the CBI also carried out searches in Saharanpur and Bulandshahr in Uttar Pradesh, Ajmer in Rajasthan and Palwal in Haryana.

Kwality Ltd, which was once among India’s oldest and most popular ice-cream makers, has been facing insolvency proceedings since December 2018. It owes around Rs 1,900 crore to creditors.