On August 17, 2023, the Directorate of Enforcement (ED) conducted a search operation in accordance with the Prevention of Money Laundering Act (PMLA), 2002, at 13 locations in Jalgaon, Nashik, and Thane as part of a money laundering investigation into a loan fraud committed by M/s Rajmal Lakhichand Jewellers Pvt Ltd, M/s R L Gold Pvt Ltd, and M/s Manraj Jewellers Pvt Ltd and their Promoters, Mr ED has confiscated a significant number of incriminating papers throughout the search operation, in addition to the profits of crime, which include 39.33 KG of gold and diamond jewellery worth at Rs 24.7 Crore and cash totalling Rs 1.11 Crore.
Investigations were started by the ED based on three CBI FIRs filed against the aforementioned companies and their promoters for crimes including criminal conspiracy, cheating, forgery, and criminal misbehaviour. According to the banks, the accused intentionally defaulted on their State Bank of India loans, resulting in wrongful losses totalling Rs 352.49 Crore (plus interest thereon) to SBI.
According to the ED investigation, the Promoters of the three accused companies conspired to fabricate the books of accounts for the three accused companies and their affiliated businesses.
The investigation uncovered a series of fraudulent activities involving Rajmal Lakhichand Jalgaon Partnership Firm, where fabricated sale-purchase transactions were recorded in the Books of Accounts. Substantial amounts of missing stock in trade were detected, notably around 40 KG of jewellery traced out of a declared stock of over 1284 KG.
This enabled the diversion of loans secured against the declared stock through the creation of fake purchases for non-existent jewellery. The accused companies, M/s Rajmal Lakhichand Jewelers Pvt. Ltd., M/s R L Gold Pvt. Ltd., and M/s Manraj Jewelers Pvt Ltd, were unable to substantiate the legitimate use of the loans and admitted the intentional absence of financial records, invoices, and ledgers during the loan disbursement period from FY 2003-2014.
This pattern persisted even in FY 2022-23, where the accused companies’ hypothecated stock was seemingly reduced to zero despite being pledged to SBI. The scheme involved the establishment of fictitious entities with family members posing as directors to fraudulently secure new loans. The acquired funds were funnelled through a complex network of false transactions involving Rajmal Lakhichand Group’s associates, ultimately being invested in tangible assets such as real estate, car dealerships, and healthcare ventures. Incriminating evidence, including documents from mobile phones, pointed to a dubious 50 million Euro FDI proposal from a Luxembourg-based entity into a real estate company controlled by Manish Jain.
In addition to two benami properties that Rajmal Lakhichand Manish Jain beneficially owns and are located in the Jamner, Jalgaon, and nearby districts, information about 60 properties belonging to the Rajmal Lakhichand Group worth more than Rs 50 Crore was discovered during the search process. Further research is now being conducted.
