In a significant development, the Enforcement Directorate (ED) has taken decisive action in connection with a bank fraud case involving M/s Lavanya Jewels, later converted to M/s Lavanya Gold Jewels India Pvt Ltd. The ED has provisionally attached immovable properties of Rs. 34.11 Crore, including land parcels, residential land, and a flat located in Coimbatore and Chennai, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The ED’s investigation stems from an FIR registered by the CBI, BS&FC, Bengaluru, against the directors of Lavanya Gold Jewels India Pvt Ltd. The FIR pertains to a bank fraud case resulting in a wrongful loss of Rs. 65.00 Crore to the State Bank of India.
According to ED findings, M/s Lavanya Jewels secured Cash Credit facilities from the bank based on inflated figures of its stock-in-hand and debtors. The funds obtained were reportedly misused, involving repayment to private financiers at exorbitant interest rates of 60% to 100% per annum and for non-business purposes.
The investigation also revealed illicit activities by the company directors, who illegally took gold bars and jewelry for personal use. Subsequently, they converted the gold inventory into Bitcoins outside India, laundering undisclosed proceeds of crime through complex crypto accounts. The directors then utilized the same income to acquire a flat worth Rs. 1.70 Crore in Chennai.
Furthermore, ED’s probe uncovered fraudulent e-auction practices, where a property mortgaged by M/s Lavanya Jewels was taken in e-auction by a real estate entity at a significantly lower value in the benami name of an employee. This transaction, amounting to around Rs. 6.5 Crore (against a market value of more than Rs. 20 Crore), constitutes proceeds of crime and resulted in a loss to the bank.
Consequently, the Directorate has provisionally attached immovable properties worth Rs. 34.11 Crore involved in the money laundering activities. The ED’s actions underscore its commitment to combating financial crimes, exposing fraudulent practices, and ensuring accountability for those involved in the Lavanya Jewels bank fraud case.
