MUMBAI: Following reports about a fresh Rs 824 crore loan fraud, shares of State Bank of India (SBI) hit a 52-week low at Rs 240.65 on NSE on Thursday. Its previous low was Rs 241.15 in October last year.
A consortium of 14 banks have reportedly lent to Chennai-based Kanishk Gold Pvt Ltd. SBI, the lead banker, has filed a case alleging mismanagement and falsification of accounts.
The Central Bureau of Investigation (CBI) has registered a case based on the complaint, where SBI alleged of a Rs 824 crore fraud. Though SBI’s individual exposure was about Rs 215 crore, the security available with it to cover the loss was only around Rs 156 crore, which sent the stock downwards on Thursday. The saving grace is that the company’s accounts were declared fraud and NPA in 2017-18 by various lenders.
As per the complaint, the loan accounts of the company were taken over by the SBI from the ICICI in 2008, while its banking arrangement was converted into a multiple banking system in March, 2011. SBI also alleged that the company had misrepresented and falsified its records and financial statements to show a rosy picture since 2009 to avail credit facilities.
Kanishk Gold and its directors allegedly diverted the funds detrimental to the rights and interests of the bank, SBI said, adding that the agency should register a case against Kanishk Gold, its promoter director Bhoopesh Kumar Jain and others.
Kanishk Gold was in the business of gold jewellery manufacturing, marketed under the brand name ‘Krizz’, and sold through distributors till 2014. In 2015, it changed its business model to B2B and started supplying to large retail jewellers, SBI said in its complaint.