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Jewellers drag GCPL to court over dues

Source : BUSINESS_STANDARD
Last Updated: Wed, Jan 16, 2013 19:54 hrs

A group of jewellers has moved the high court here against fast-moving consumer goods major Godrej Consumer Products Limited (GCPL) for the recovery of dues estimated at Rs 35-40 crore.

Seven suits have been filed by jewellers, including Asmi from the Gitanjali Group and from Rosy Blue’s Intergold, seeking to recover their dues for the supply of gold coins and diamond-studded jewellery to GCPL three years ago. The company had used these items to incentivise trade and boost sales, a practice common among consumer companies. GCPL hadn’t paid the jewellers for these supplies, as the orders were deemed fake.

It was found Amit Gaine, a deputy general manager in charge of purchases at GCPL, had placed the orders on behalf of the company for his personal use. Gaine was dismissed and the matter was reported to the economic offences wing, after which Gaine was sent to judicial custody. On condition of anonymity, a Gitanjali Group executive said the company, along with the other jewellers, had exhausted all avenues to recover their dues and was, therefore, moving court. “We were dealing with Gaine and he was corresponding with us through his official email id. We subsequently supplied the goods at the premises of the company. How were we to know he was not acting on behalf of GCPL?” asks Philip Trott, group company secretary and head (legal), Rosy Blue.

In response to a mail, a GCPL spokesperson said, “We deny the liability. The matter is sub-judice at this stage. The company will oppose the petition as and when it comes up before the court for hearing.”

According to a survey by New-York-headquartered risk management and consulting firm Kroll Advisory Solutions, last year, Indian firms were hit hardest by fraud. Experts said this was because many had no effective mechanism to tackle white-collar crime.

A KPMG report released last year estimated 70 per cent of firms were unable to detect fraud at workplaces. The report said avenues for fraud were also growing.

Prominent cases of fraud reported last year included the one related to former Adidas employees Subhinder Singh Prem and Vishnu Bhagat.

The two, along with three other employees, were arrested following a complaint lodged by Adidas with the Gurgaon Police, alleging Prem and Bhagat had siphoned off money from the company by creating ghost distributors and generating forged bills through five years. Adidas pegged the fraud at Rs 870 crore.




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