Mumbai: The Central Bureau of Investigation (CBI) on Wednesday evening conducted searches at 13 locations of Mumbai-based textile major S Kumars Nationwide Ltd, following a complaint by the Colaba branch of IDBI Bank. According to the CBI, the promoters and directors and other officials of S Kumars allegedly committed fraud by availing various credit/ loan facilities from a consortium of banks led by IDBI Bank.
The CBI said that S Kumars, which owns brands such as Reid & Taylor, allegedly misused and diverted bank funds from 2012 to 2018, causing a loss of around Rs 1,245.15 crore to banks. The complaint was filed by IDBI Bank and on behalf of other member banks of the consortium, such as the Central Bank of India, The Jammu & Kashmir Bank Ltd, Punjab National Bank and Indian Bank.
The searches were conducted at S Kumars’ premises in Maharashtra, Gujarat and West Bengal, said a CBI officer who was part of the searches. The CBI had already registered a case against S Kumars in 2021 for allegedly cheating a consortium of banks to the tune of Rs 160.68 crore.
The CBI filed the case on a complaint from IDBI Bank alleging that the company and its MD Nitin Kasliwal and directors Vijay Goverdhandas Kalantri, Anil Kumar Channa, Rajinder Krishan Garg, Jagadeesh Sanjeeva Reddy and others had indulged in fraudulent transactions, causing a loss to the bank.
The company had availed various credit facilities from the Union Bank of India, which turned into non-performing assets in 2013. The account was later declared ‘fraud’ in 2020, after a forensic audit by the KPMG. The forensic audit also red-flagged transactions with two potentially linked customers and over three-fourths of transactions with non-operating entities.
The allegations are that S Kumars wrote off receivables from the customers and 94 per cent of the sales shown by the company were to select distributors. The CBI case says that 75 per cent sales and purchase transactions were done with non-operating entities and that auditors of the borrower company had also invested in it.