CBI arrests 4 directors of perfume making company for cheating banks

The CBI has arrested four directors of a Delhi-based perfume maker on charges of cheating a consortium of banks to the tune of Rs 2,240 crore using over 100 shell companies.
 
Sanjay Jain, Rajiv Jain, Rohit Chaudhary and Sanjeev Agarwal of Surya Vinayak Industries Ltd have been arrested on the complaint of Punjab National Bank (PNB), the CBI sources said. The accused could not be contacted for their side of the story.
 
The arrests came on a complaint filed by the PNB, the lead bank of the consortium, after investigations claimed that accused "fraudulently used" more than 100 shell companies for "round tripping and diversion of bank funds".
 
"There was no genuine business transaction between the said company (Surya Vinayak Industries Ltd) and shell companies," a CBI statement said.
 
The company also diverted around Rs 376 crore out of the Working Capital Limit obtained from consortium of Banks to six wholly-owned foreign subsidiaries based in Singapore, Hong Kong, Dubai, Indonesia, Ghasa and China.
 
The company's name had figured among the top 10 defaulters in a list of 406 accounts released by All India Bank Employees' Association earlier.
 
The PNB had filed the complaint with CBI in December 2013 charging its directors of cheating, fraud and misappropriation.
 
The accounts of the company with the consortium were declared Non Performing Assets in 2012. The Reserve Bank of India (RBI) had also directed the 23-bank consortium led by the PNB to classify the account as fraud.
 
According to a RBI communication, the company had "diverted funds on a large scale". The working capital funds were transferred to wholly-owned overseas subsidiaries.
 
The RBI had claimed that company did not do any export in the case of export finance availed by it from the banks and diverted the working capital funds to Falcon Jersey Pvt Ltd, an entity controlled by it.
 
After RBI's missive, the PNB declared Sanjay Jain and Rajiv Jain as wilful defaulters. The company is part of Floriana Group that manufactures essential oils, sandalwood oil and perfumery compounds.
 
The Enforcement Directorate is also investigating money laundering charges against the company. The ED investigators claimed that money has been laundered into different assets as investment, including hotel, mall and residential properties. The agency has attached assets worth around Rs 90 crore so far.