Bank 'fraud': ED attaches over Rs 440 crore assets of ex-promoters of Kwality

These properties were "owned" by former promoters Siddhant Gupta and Sanjay Dhingra of Kwality Limited through "dummy" companies. The driver and security guard of the said promoters were the directors in such companies, the ED added.

PTI

January 16, 2025 / 21:42 IST

Enforcement Directorate, Kwality Ltd,

The Enforcement Directorate (ED) on Thursday said it has attached assets worth more than Rs 440 crore in Delhi, Haryana, and Punjab as part of an alleged bank loan fraud-linked money laundering case against the former promoters of dairy major Kwality Ltd.

An order was issued under the Prevention of Money Laundering Act (PMLA) for the provisional attachment of a 12,000 square-yard farmhouse located at DLF Chhatarpur, residential properties at Vasant Vihar and Punjabi Bagh in Delhi, and some residential plots at Karnal (Haryana) and Mohali (Punjab), the federal agency said. The total value of these properties is Rs 442.85 crore. These properties were "owned" by former promoters Siddhant Gupta and Sanjay Dhingra of Kwality Limited through "dummy" companies. The driver and security guard of the said promoters were the directors in such companies, the ED added.

The agency had raided 15 locations in Delhi-NCR in November 2024 as part of the action against the former promoters and directors of the company — Sanjay Dhingra and Siddhant Gupta — apart from some "shell" (paper) companies related to them. Kwality has since been liquidated and is now with new owners.

The ED case stems from a September 2020 CBI FIR filed against the promoters and Kwality, which was engaged in processing and trading of milk, ice cream, and other dairy products, for an alleged loan fraud of Rs 1,400 crore against a consortium of banks. The then promoters and directors, the agency said, "fudged" the books of accounts to show higher sales and debtors. "Huge amounts of trading (sales/purchases) were made without actual physical deliveries or receipt of goods at factory premises."

It was also noted that sham companies/firms operated through implanted/dummy owners were used to divert the bank funds. The diverted funds were circulated and layered to conceal their origin and routed to different accounts as per the instructions of the promoters for purposes not intended by the banks, the ED alleged.