ED files prosecution complaint against jewellery firm promoter and ex-MP, his son in bank fraud case

Nagpur: The Enforcement Directorate (ED) has filed a prosecution complaint in a court here against three jewellery firms and their promoters, including former MP Ishwarlal Jain and his son and former MLC Manish Jain, in connection with a multi-crore bank fraud case.

The central probe agency filed the prosecution complaint on July 26 before a special court in Nagpur hearing cases related to the Prevention of Money Laundering Act (PMLA).

The court has taken cognisance of the prosecution complaint, the ED said in a statement on Monday.

The prosecution complaint is against three jewellery firms - Rajmal Lakhichand Jewelers Pvt Ltd, R L Gold Pvt Ltd, Manraj Jewelers Pvt Ltd - and their promoters/directors/guarantors, Ishwarlal Jain, Manish Jain and others.

Ishwarlal Jain, a former treasurer of undivided Nationalist Congress Party (NCP) and close aide of NCP (SP) chief Sharad Pawar, is a former Rajya Sabha member, while his son Manish Jain was a member of the Maharashtra legislative council.

The ED initiated the investigation on the basis of three FIRs registered by the Central Bureau of Investigation (CBI).

As per the FIR, the jewellery firms and their directors/promoters were involved in the offences of criminal conspiracy, cheating, forgery and criminal misconduct, and had intentionally defaulted on their loans and borrowings from State Bank of India (SBI), causing a loss to the tune of Rs 352.49 crore (plus interest thereon) to the bank.

The ED said that as per its investigation, the promoters had submitted fake financials to avail the loans. They also engaged in round-tripping of transactions to inflate the financials and booking bogus sale purchase transactions in the books of accounts of the firms to siphon off the loan proceeds for investments in real estate properties, in collusion with the auditors of the companies, it said.

The promoters were also found to have fraudulently alienated and sold off parts of the mortgaged properties against these loans without the bank's consent. They engaged in the destruction of incriminating data concerning the accused companies to prevent any scrutiny of the utilisation of the loan proceeds, the ED said.

Last year, the ED had conducted search operations at 13 official and residential premises of Rajmal Lakhichand group in Jalgaon, Nashik and Thane in Maharashtra, and seized gold, silver and diamond jewellery/bullion worth Rs 24.36 crore and cash of Rs 1.121 crore along with various incriminating documents.

Search and post-search investigative findings revealed fictitious stock/missing stock inventories of bullion and gold jewellery in books, use of shell companies, employment of dummy directors, it said.

The ED provisionally attached movable and immovable assets valued at Rs 315.60 crore in October last year. The attached assets include benami properties acquired by the Jains, the central agency said.