The Enforcement Directorate (ED) has arrested Kewal Krishan Kumar, the chairman-cum-managing director of Shakti Bhog Foods Limited, on money-laundering charge in connection with a bank fraud case involving ₹3,269.42 crore.
The agency also conducted searches at nine locations in Delhi and Haryana. “He was produced before a special court that sent him to ED custody till July 9,” said an official.
The ED probe is based on a First Information Report registered by the Central Bureau of Investigation (CBI) on December 31 last year, against the company and its directors. It is alleged that they diverted and round-tripped the loan funds through related entities.
According to the CBI case, the accused persons cheated a consortium of 10 banks to the tune of ₹3,269.42 crore. Apart from Mr. Kewal Krishan Kumar, the CBI has named two company directors, Siddharth Kumar and Sunanda Kumar, as accused.
The company is into manufacture and sale of a range of food products like wheat flour, under the well-known brand name Shakti Bhog, rice, biscuits and cookies in northern India. It has third-party tie-ups in other regions.
The alleged fraud came to light during a forensic audit of the transactions from April 2013 to March 2017. It detected alleged manipulation of the account statements and stock status.
While the audited financial statement for 2015-16 mentioned that inventory worth ₹3,035.52 crore was damaged due to pest, and therefore sold at substantially low rates, in the stock and receivable audit conducted for January-February 2016, the stock in September 2015 was said to be worth ₹3,537.55 crore, as alleged.
The banks found that two of the five vendors shown to have been paid money by the company did not exist. The vehicle numbers mentioned on the goods transport challans were of two wheelers and other classes of vehicles.
