The Enforcement Directorate conducted searches for more the 48 hours on Thursday and Friday at 13 premises in Jalgaon, Nashik and Thane belonging to Ishwarlal Shankarlal Jain Lalwani, a former Rajya Sabha member and an ex-treasurer of the Nationalist Congress Party (NCP), in connection with a money laundering investigation related to a loan fraud of Rs585 crore.
The ED initiated investigations on the basis of FIRs registered by the CBI against three jewellery firms and their promoters for offences of criminal conspiracy, cheating, forgery and criminal misconduct, for intentionally defaulting on loans taken from State Bank of India and causing wrongful loss to the tune of Rs352.49 crore and interest to the bank.
During the operation, the ED seized several incriminating documents, as well as 39.33 kg of gold and diamond jewellery valued at Rs24.7 crore and cash amount of Rs1.11 crore.
The ED recorded statements of Lalwani and his son Manish, who have also been summoned to appear before the ED office in connection with the case.
Lalwani has said that gold and cash amounting to Rs87 lakh were confiscated from RL Enterprises, which is registered under the name of his grandsons who founded them some time ago and contended that these companies are not connected with the ongoing case.
He said that these are their personal ventures and they have not taken any loan from any bank. Lalwani also clarified that the cash of Rs1.11 crore recovered from his house also belongs to his grandsons’ company and they had entrusted it to him because the banks were closed on August 14 and 15.
The ED action comes in the wake of an FIR registered by the CBI in 2022 against a jewellery firm associated with Lalwani and others, following complaints lodged by SBI, which alleged irregularities in the transactions involving three accused firms — Rajmal Lakhichand Jewellers Pvt Ltd, Manraj Jewellers Pvt Ltd, and RL Gold Pvt Ltd. The irregularities are related to transactions with the SBI, spanning the period from 2002 to 2014.
According to SBI complain, Rajmal Lakhichand Jewellers caused a loss of Rs206.73 crore to the bank, while RL Gold caused a loss of Rs68.19 crore and Manraj Jewellers caused a loss of Rs76.57 crore.
The ED investigation has revealed that the promoters of the three companies had engaged in fictitious transactions and fabrication of the books of accounts. The accounts of the companies named in the FIR show payments made to Rajmal Lakhichand for purchases of gold but receivables for products sold to it are shown as outstanding.
Bogus sale-purchase transactions had been shown in the books. A large amount of stock in trade was found to be missing. Against a declared stock of more than 1284 kg of jewellery, the ED could trace only 40 kg. Thus, loans taken against this declared stock was siphoned off by showing bogus purchases for non-existent jewellery.
The promoters also failed to produce supportive documents to prove genuine utilisation of the loans by the three companies. No books of accounts, invoices or supportive documents were maintained for the period FY 2003-2014. Analysis of the accounts of the companies also showed that the stock as on August 17, 2023, in the companies had been brought to zero despite being hypothecated to SBI.
Fictitious entities with relatives as dummy directors were created to apply for new loans, which were routed through a convoluted web of bogus transactions through related parties of Rajmal Lakhichand Group and finally invested in immovable properties by the promoters. A new jewellery business in the name of RL Enterprises were made in the real estate sector, car dealership, and in the setting up a hospital.
Lalwani said they have approached the high court seeking the quashing of the FIR. He also said that before declaring any account as fraudulent, the bank should provide the party with an opportunity for settlement to ensure natural justice. Despite some internal disputes among the promoters, they offered a settlement, but the bank declined the proposal and filed a complaint against their firms, he contended.