ED arrests Hyderabad jeweller for money laundering

Hyderabad: The Enforcement Directorate (ED) arrested Sanjay Agarwal, the managing partner of Ghanshyamdas Gems and Jewels, under the Prevention of Money Laundering Act (PMLA)-2002 on Saturday in a loan fraud case in which State Bank of India, Hyderabad, suffered a loss of Rs 67 crore. The ED initiated a money laundering investigation based on an FIR booked by the CBI of Bangalore unit under various Sections of Indian Penal Code (IPC). According to a release by the agency, the CBI registered another FIR against Agarwal and others for fraudulently removing gold and jewellery hypothecated to Punjab National Bank against gold loan availed by his firm, thereby causing a loss of Rs 31.97 crore to the bank.

Investigation by ED revealed that Agarwal was the managing partner in Ghanshyamdas Gems and Jewels which is engaged in wholesale trading of gold. In 2010 and 2011, he had fraudulently procured gold bullion from SBI by producing fake bank guarantees (BGs) and covering letters purportedly issued by PNB and sold the gold bullion in local market to various jewellers and small traders in cash.

The cash generated was diverted to several other firms floated by Agarwal in the name of his wife, brothers and his employees. Later, after default on the gold loan, the SBI found that the BGs and letters were forged. On August 17, 2011, Agarwal and his brothers, Ajay and Vinay, clandestinely removed the entire stock of gold and jewellery kept at their store in Abids. The stock was already hypothecated to PNB against gold loan availed by the firm, the release added.