Kwality’s Former Executives Under Scrutiny; Special CBI Court...

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Kwality’s Former Executives Under Scrutiny; Special CBI Court Directs Attachment Of Properties Over Fraud Charges

| Updated: September 1, 2022 15:53

After the reports established by the officials, a special CBI court has directed over the attachment of three prime properties of former directors of India’s dairy major Kwality Ltd, currently facing bank fraud charges of INR 1400 crore.

The officials reported that the court has ordered properties in connection with the case in posh areas of Vasant Vihar, Punjabi Bagh (East) and Basai Dara pur (an old village situated in north-eastern part of Delhi) worth INR 40 crore need to be sustained under the charges. 

The special CBI court had ordered the sub-registrar not to allow transfer or registration of these properties to anyone on an application filed under it.

The officials stated, “The application had sought attachment of the properties that were procured during 2015-18 when the company had allegedly started default of loan payments.  The agency had booked Kwality Ltd and its directors in September, 2020 for allegedly cheating a consortium of 10 banks, led by the Bank of India, of over INR 1400 crore through bloating of financial statements and diversion of loan funds.”

Earlier, the CBI had registered the case against Kwality Ltd. — which commenced as an ice-cream manufacturing company and diversified into milk-based products — and its directors Sanjay Dhingra, Siddhant Gupta, Arun Srivastava besides other unidentified parties.

The investigating agency had acted on a complaint filed by the Bank of India.

In 2018, Kwality Dairy was charged with bankruptcy proceedings after the global equity firm KKR had approached NCLT (National Company Law Tribunal) claiming the company had defaulted over a financing arrangement of INR 600 crore. Multiple other creditors including Punjab National Bank and Bank of India had also filed their claims at the Tribunal.

In September 2021, Sarda Mines, a company affiliated with Jindal Steel and Power Limited (JSPL) won the e-bid process with an offer of INR 121 crore. The bid is still waiting for its final approval from the NCLT.

Earlier in January 2021, the Tribunal had directed to liquidate debt-ridden dairy firm Kwality Ltd after the company failed to finalise any bidder within the specified time-frame.

India’s dairy major Kwality Ltd. is a processor and handler of dairy products listed on BSE as a public Limited Company. The company is involved in the production of various kinds of dairy products -milk, ghee, butter, milk powder, curd, yogurt, cheese etc.

Besides, Kwality Ltd. had established a procurement network comprising 350,000 farmer families across 4,700 villages in northern India and had set up nearly six plants in Haryana, Uttar Pradesh and Rajasthan with a processing capacity of 3.4 million litres (900,000 U.S. gal) milk per day.

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