September 23, 2020

Indian dairy company Kwality under investigation for suspected US$190 million fraud

India's federal police said Kwality Ltd, a India-based dairy company, is under investigation for allegedly cheating a consortium of banks of about US$190 million, Reuters reported. 

The police investigation was initiated following a complaint by state-run lender Bank of India.

The Central Bureau of Investigation (CBI) said it has conducted searches at eight locations, with investigations ongoing.

Sanjay Dhingra, Kwality's managing director, was unreachable for comment.

Kwality Ltd was founded in 1992 with six manufacturing units. According to its website, it's one of India's fastest growing private dairy companies and exports to more than 28 countries.

Canara Bank, Bank of Baroda, Andhra Bank, Corporation Bank, IDBI Bank, Central Bank of India, Dhanlaxmi Bank, and Syndicate Bank were the other banks named in the complaint.

Last week, Kwality reported a combined net loss after tax of INR 142.5 million (~US$1.9 million; INR 100 = US$1.36) for the quarter ending on June 2020, compared to INR 646.2 million (~US$8.7 million) in 2019.

US-based investment company KKR & Co. L.P. invested INR 5.2 billion (~US$70 million) into Kwality for expansion and part repayment of debt in 2016. In 2018, KRR India started bankruptcy proceedings against Kwality.

-      Reuters