Nathella Sampath Jewellery accused of 379 crore fraud
As a wave of jewellery bank fraud cases has emerged in the wake of the Nirav Modi Investigation, Chennai’s Nathella Sampath Jewellery Pvt. Ltd. has been accused of a 379 crore rupee (approximately 57 million US dollars) fraud.
On March 24, the Central Bureau of Investigation (CBI) registered a case against Nathella Sampath Jewellery, a gold jewellers based in Chennai. The CBI case states that the promoters and directors of Nathella Sampath Jewellery defrauded three banks out of around 379 crore rupees. The fraud is believed to have been running since 2010 and involves the use of false documents.
The State Bank of India (SBI) informed the Bombay Stock Exchange on March 23 that the jewellery business had committed a loan fraud of 250 crore rupees (approximately 37.6 million dollars) dating back to 2010. The CBI then filed a first information report (FIR) and that stated that the promoters and directors of Nathella Sampath Jewellery defrauded the State Bank of India (SBI) to the tune of 278.31 crore rupees (approximately 41.8 million dollars).
The FIR also stated that the jewellers had defrauded the Union Bank of India out of 56.84 crore rupees (approximately 8.5 million dollars) and the HDFC Bank out of 44.6 crore rupees (approximately 6.7 million dollars). The FIR said: “The total loss to the banks due to the fraud is Rs 379.75 crore (outstanding as of February 2, 2018) plus accrued interest from March 1, 2018. The actions of the company and promoters amount to falsification of accounts, criminal breach of trust and cheating with intention to cause a wrongful loss.”
The CBI has also stated that a fraud case against Nathella Sampath Jewellery was registered with the Economic Offences Wing in November 2017. At that time the jewellers had admitted owing around 75 crore rupees (approximately 11.3 million dollars) to a group of 21,000 people who paid monthly instalments. The investigation is ongoing.
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