ED seizes cash, luxury cars in case against ex-promoters of Kwality Ltd

New Delhi, Nov 29 (PTI) The Enforcement Directorate on Friday said it seized Rs 1.3 crore in cash and “evidence” related to shell companies after it searched the former promoters of dairy major Kwality Ltd. as part of a Rs 1,400 crore alleged bank fraud linked money laundering case.

Luxury cars and demat accounts valued at about Rs 6.5 crore have also been frozen under the provisions of the Prevention of Money Laundering Act (PMLA), it said in a statement.

The federal agency raided 15 locations in Delhi-NCR on November 27 in the case covering the premises of promoters and directors of the erstwhile company like Sanjay Dhingra and Siddhant Gupta apart from some “shell” (paper) companies related to them.

Kwality Ltd. has been liquidated and is now with new owners.

The ED case stems from a September 2020 CBI FIR filed against the said promoters and Kwality Limited, which was engaged in the processing and trading of milk, ice creams and other dairy products.

The CBI FIR alleged that the said erstwhile company, through its directors, indulged in “falsification and fabrication” of books of accounts by “misrepresentation” of sales, purchases, debtors and creditors and subsequently “cheated” a consortium of banks to the tune of Rs 1400.62 crore.

Probe found, the ED claimed, the accused “manipulated” the books of accounts to show “higher” sales and debtors.

“Huge amounts of trading (sales and purchase) were made without actual physical deliveries or receipt of the goods at factory premises,” according to the agency.

It was also noticed that “sham” companies operated through “dummy” owners also sought loans but such funds were used as per the instructions of erstwhile Kwality Ltd., it claimed.

“The funds diverted through the stated modus operandi was circulated and layered in order to conceal its origin and routed to different accounts as per the instructions of the promoters…,” the ED alleged.

The agency said Rs 1.3 crore in cash and “evidence” related to assets and bank accounts held through several “shell” companies by the promoters was seized during the raids.

The agency also froze some luxury cars like Porsche, Mercedes, and BMW (valued at about Rs 4 crore) and demat accounts of Rs 2.5 crore during the searches.