Hyderabad-Based Jewellery Firm Promoter Arrested In Bank Loan Fraud Case

The Enforcement Directorate (ED) on Sunday said it has arrested a managing partner of a Hyderabad-based gems and jewellery firm in a money laundering case linked to an alleged bank loan fraud of Rs 67 crore.

Sanjay Agarwal was produced before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad on February 11 and the court remanded him to 15 days of judicial custody.

Agarwal is a managing partner in Ghanshyamdas gems and jewels, Hyderabad which is engaged is wholesale trading of gold.

He was already lodged in a Kolkata jail after the ED had arrested him in an another money laundering case linked to alleged diversion of duty-free export bound gold in the domestic market.

The latest case, the agency said in a statement, is related to a "loan fraud case in which the State Bank of India (SBI), Hyderabad, suffered a loss of Rs 67 crore." Probe found that "in In 2010-2011, Agarwal fraudulently procured gold bullion from SBI by producing fake and forged bank guarantees and covering letters purportedly issued by PNB and sold the gold bullion in local market to various jewellers and small traders in cash." The cash was "diverted" to several other firms floated by Agarwal in the name of his wife, brothers and his employees, it alleged.

"Later, after default on the gold loan happened, the SBI found that the bank guarantees and letters were forged. On 17.08.2011, Agarwal and his brothers Ajay and Vinay clandestinely removed the entire stock of gold and jewellery kept at their store in Abids, Hyderabad," the ED said.  The stock was already hypothecated to the PNB against gold loan availed by the firm, it said.

The CBI had also booked Agarwal and others others for "fraudulently removing gold and jewellery hypothecated to the PNB against gold loan availed by his firm and thereby causing a loss of Rs 31.97 crore to the Punjab National Bank."