2018 might well be remembered as the year when banks sent the Central Bureau of Investigation chasing after defaulting jewellers from around the country.
The latest jeweller accused of loan default is the head of Chennai-headquartered jewellery chain Kanishk Gold Private Limited.
Kanishk, which had offices on the seventh floor of Prashanth Gold Tower in T Nagar, is being accused by the State Bank of India of having defrauded 14 banks of Rs 842.15 crore.
The list of lenders to Kanishk Gold reads like the who's who of Indian banking: State Bank of India lent Rs 215 crore, Punjab National Bank (Yes, they are here too!) Rs 115 crore, Union Bank of India Rs 50 crore, Syndicate Bank Rs 50 crore, Bank of India Rs 45 crore, IDBI Bank Rs 45 crore, UCO Bank Rs 40 crore, the Tamilnad Mercantile Bank Rs 37 crore, Andhra Bank Rs 30 crore, Bank of Baroda Rs 30 crore, HDFC Bank Rs 25 crore, ICICI Bank Rs 25 crore, Central Bank of India Rs 20 crore and Corporation Bank Rs 20 crore.
Kanishk, SBI alleges, had stopped interest payments to all banks since April 2017.
Kanishk's promoters are Bhupesh Kumar Jain and his wife Neeta Jain. Bhupesh Jain also ran a jewellery B2B business named Krizz, which reportedly was apread across more than 10 locations in the country. The duo, according to Zaubacorp data, were also directors of 16 other companies. Whether these were shell companies remains to be known.
"With an investment of Rs 980 crore, the company plans to set up 40 B2B showrooms, 37 in India and one each in Dubai, Singapore and Malaysia in by 2017. Last year, the company achieved a turnover of Rs 1700 crore. This year, we expect to achieve Rs 3800 crore turnover and Rs 6000 crore by 2016-17," Jain who termed himself Chairman and Managing director, Krizz, was quoted as saying by the Times of India on August 19, 2015.
But in May 2017, Bhupesh Jain abruptly declared bankruptcy and shut down his businesses.
A representative of the Madras Jewellers and Diamond Merchants Association told the Times of India that "the company shut down... since it couldn't cope with the losses."
A visit by the bankers to the offices of the jewellery firm that month confirmed they had indeed shut all operations, including their manufacturing hub in Vedanthangal.
Interestingly, Bhupesh Jain had been remanded to 14-day judicial custody in Chennai's Puzhal prison in September 2017 for GST tax evasion to the tune of Rs 20 crore.
Two months later, in November 2017, SBI informed the Reserve Bank of India that the account was a Non-Performing Asset.
Two more months after that, the SBI approached CBI charging Kanishk of "manipulating records and shutting shop overnight", it was reported.
The Jains were believed to be in Mauritius, but reports have now confirmed that they have appeared before the CBI for questioning in Bengaluru. Simultaneously, the CBI has also begun searching their properties in connection with the case.
According to Ministry of Corporate Affairs data, though, Bhupesh and Kanishk Gold owe an even bigger sum - Rs 1500-crore plus. Full details here: