P&S Jewellery Ltd joined the club of gold and jewellery businesses that have been officially declared as “wilful defaulters” and allegedly defrauded multiple bank of the largest amounts. The Central Bureau of Investigation (CBI) registered a bank fraud case of Rs. 568.52 crore against PS Jewellery Ltd officials. CBI conducted searches at 13 premises that belonged to the accused. The incriminating documents recovered from other locations. Its one of the important aspect as a whole.
Understanding P&S Jewellery Ltd Case
Since, the investigation took place very deeply. Joining the likes of Forever Precious Jewellery and Demands and Winsome Diamonds, both promoted by Jatin Mehta, who has now fled India, this FIR by the CBI adds one more small/medium jeweller to the list of bank defaulters it has registered cases against.
The CBI, in its FIR, has alleged that Shah’s P&S Jewellery Ltd had fraudulently availed cash credits to the tune of Rs 578.50 crore from a consortium of eight banks, including the Union Bank of India (consortium leader), State Bank of India, Andhra Bank, Bank of Baroda, Central Bank of India, Canara Bank, Vijaya Bank and Syndicate Bank by way of forging documents and using them as genuine.
In the case unknown public servants probed. Hence, the total fraud amount came to Rs. 568.52 crore.
Investigation of P&S Jewellery Ltd Case
The Jain Mehta company has claimed that the customers in UAE had’nt anticipated. In terms of gold market. Therefore, they were unable to pay the dues to them. Therefore, it resulted in Winsome Diamonds that defaulted in loan payment. PS Jewellery had also claimed previously.
In fact, in August last year, the National Company Law Tribunal had liquidated Paresh Shah’s company and the concerned Appellate Tribunal had in 2019 also dismissed their appeal.
From NCLT proceedings documents revealed that the company has total default amount of Rs. 788.65 crore. The Union Bank had most exposure of Rs. 313.57 crore. The State Bank of India has 163.63 crore.
Additionally, the jeweller’s accounts were declared NPA in March 2015 and in 2017, two banks — Central Bank of India and Andhra Bank had sent detailed communications to the defaulting company, informing it that they had declared P&S Jewellery as a “wilful defaulter” based on “sufficient proof” and information that the loan amounts were siphoned off for purposes other than shown.
Final Words regarding the P&S Jewellery Ltd
While PS Jewellery had filed for bankruptcy under the Insolvency and Bankruptcy Code, all resolution plans had been rejected by the Committee of Creditors as they came nowhere near to recovering the default loan amounts. NCLT admitted the company in 2018. The 12,000 employees jobs affected as the company liquidated. The NCLAT had dismissed PS Jewellery Ltd appeal to stay the earlier liquidation.
