The Central Bureau of Investigation (CBI) on Friday (January 1) registered a case against Shakti Bhog Foods Limited on charges of alleged fraud of Rs 3269 crores on a consortium of ten banks, CBI officials said.
Based on a complaint from the State Bank of India (SBI), which led the consortium, the CBI has filed an FIR against the managing director of the company, Kewal Krishan Kumar, along with its directors, Siddharth Kumar and Sunanda Kumar.
Searches were conducted at eight locations in Delhi at the official and residential premises of the accused, which led to the recovery of incriminating documents.
The SBI, in its complaint, alleged that the directors forged documents and falsified their accounts to siphon public funds.
The Delhi-based company is in the business of manufacturing and selling food items like rice, biscuits, cookies, and wheat flour under the brand name of Shakti Bhog in north India.
The 24-year-old company grew organically and had a turnover growth of Rs 1,411 crores in 2008 and Rs 6,000 crores in 2014, SBI said.
It is reported that the company's growth came to a stop in 2015 and its account turned into a non-performing asset (NPA). The company's account was declared a fraud in 2019.
The FIR suggests that the fraud was found out after the forensic auditors submitted their report into the account in June 2019. The said report showed alleged manipulation of the account statements.
The audit also said that the company in its books of 2015-16 showed damage of inventory worth Rs 3000 crores due to pests, which was sold at lower prices. It was found to be contradictory as the stock and receivable audit report showed that it had a stock of more than Rs 3,500 crores, its warehouses were fully stocked, and none of the inventory was obsolete in September 2015.
The audit report further added that the company filed no claims about its stock getting damaged due to pests, even though it had an insurance policy to protect against earthquake, fire, and other perils.
The accounts did not show any money received on account of selling the damaged stock at lower prices, it added.
CBI officials added that the audit report also showed suspicious payments and round-tripping of funds by the company, apart from manipulation of account books.