ED searches 15 locations in Kwality Limited case

The ED’s money laundering probe is based on a case registered by the Central Bureau of Investigation against the accused persons, who were the promoters/directors of Kwality Limited.

The Enforcement Directorate has searched 15 locations in and around Delhi, linked to the erstwhile Kwality Limited, its then promoters/directors Sanjay Dhingra, Siddhant Gupta, and the alleged shell companies related to them.  

The ED’s money laundering probe is based on a case registered by the Central Bureau of Investigation against the accused persons. They falsified the books of accounts by misrepresentation of sales, purchases, debtors, and creditors and thereby cheating a consortium of lending banks to the tune of ₹1,400.62 crore, as alleged. 

According to the ED, the then promoters/ directors manipulated the books of accounts to show higher sales and debtors. “Huge amounts of trading [sales purchase] were made without actual physical deliveries or receipt of the goods at factory premises...sham companies/firms operated through implanted/dummy owners also sought loans but such funds were used as per the instructions of erstwhile Kwality Limited,” it said. 

It is alleged that the funds which were receivable against credit sales were also hugely inflated to cheat the banks. “...the entities with whom there were huge receivables are the bogus entities which were run by either the employees of erstwhile Kwality Limited or the known persons of directors...the directors and proprietors of the concerns, who were the suppliers and customers, were the employees of erstwhile Kwality Limited,” said the ED.

During the search operations, as alleged, the agency seized ₹1.30 crore and various evidence related to assets/bank accounts held through several shell companies by the promoters. “It was found that drivers/ employees of the promoters were made directors in such shell companies. High-end luxury cars like Porsche, Mercedes, BMW, etc. having a purchase value of about ₹4 crore, held in the name of such beneficially owned companies and demat accounts having an investment value of about ₹2.50 crore have been frozen,” an official said.  

Published - November 29, 2024 10:58 am IST