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SBI lodge complaint with CBI over Rs. 250 cr fraud by Chennai jeweller

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(G.N.S) Dt. 24
Chennai
Another fraud case, where CBI has lodged a complaint against a Chennai based jewellery chain Nathella Sampath Jewelry Pvt Ltd. The State Bank of India on Friday said, Nathella Sampath Jewelry had misrepresented financial statements from 2010 and liquidated the primary asset kept as security/collateral”.
“About Rs.250 crore loans were sanctioned by SBI in a consortium arrangement — which has been classified by the bank as fraudulent on December 22, 2017 — for having misrepresented the financial statements from 2010 and liquidated its primary asset. The matter has been reported to CBI for necessary action.”
SBI said, “Nathella Sampath Jewelry had misrepresented financial statements from 2010 and liquidated the primary asset kept as security/collateral”. “About Rs. 250 crore loans were sanctioned by SBI in a consortium arrangement — which has been classified by the bank as fraudulent on December 22, 2017 — for having misrepresented the financial statements from 2010 and liquidated its primary asset. The matter has been reported to CBI for necessary action,” said SBI.
NSJPL was incorporated on April 3, 2007 by combining three partnership firms — Nathella Sampath Jewellerie, NSC Jewellers and Nathella SampathuChetty (NSC) & Co.
Since last year the jewellery chain’s subsidiary NSC has been in the news over mismatch in its fundscollected and deployedover a goldchitfund scheme. NSC shut down all its branches in Chennai in October 2017 creating panic among its customers. The jeweler stuck notices outside its closed branches stating its inability to pay dues to customers. By November 2017, NSC’s promoters admitted to the Economic Offences Wing (EOW) police that it owed about Rs 75 crore to more than 21,000 people who had paid monthly installments under various chit fund schemes to buy gold ornaments and bullion. Police had received complaints from more than 1,000 customers, based on which the EOW had registered a case against the firm’s board members — MDRanganatha Gupta, his sons Prabanna Kumar and Prasanna Kumar, and their relative Kota Suresh and five others.
But long before the visible shut down, credit rating agencies had been issuing warnings on the group — citing shortage of funds. In October 2016 — nearly a year before NSC folded up — CARE Ratings had downgraded it to BBB — just one grade above least investment grade. The rating agency had said the jeweler had exhausted all its available creditliens and showed stress and tight liquidity.
After this warning, NSC stopped cooperating with the ratings agency and did not share any information or financial statements for a ratings review. By August 2017, CARE downgraded the company further to “Issuer not co-operating” category. Following the police complaints, CARE moveditto ‘default’ category last November.

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