MBS jewellers on CBI radar for gold scam

HYDERABAD: A leading Hyderabad-based jewellery firm, Musaddilal Bhagwat Swaroop (MBS) Jewellers, is on the radar of the CBI for allegedly duping the Minerals and Metals Trading Corporation (MMTC) by taking advantage of dollar-rupee fluctuations.

The MBS group belongs to Sukesh Gupta, who was earlier summoned by the CBI in connection with the disproportionate assets case against Kadapa MP Y S Jagan Mohan Reddy.

Top sources disclosed that MMTC, a public sector undertaking, recently approached the CBI and lodged a complaint against a few leading jewellers across the country, alleging that they indulged in financial irregularities in collusion with some MMTC employees.

'The jewellers named in the complaint belong to different cities including Hyderabad, Mumbai and Surat,' sources said.

Following this, the CBI has registered cases against the jewellers under Sections 420 (cheating) and 409 (criminal breach of trust) of the Indian Penal Code.

Sources said the jewellers allegedly purchased huge quantities of gold through MMTC sometime ago.

'They bought gold for a certain dollar price and paid MMTC in rupees. However, there was a fluctuation in the dollar rate and the jewellers and their bankers were supposed to bear the difference. Instead, they chose not to pay the difference, which amounted to about Rs 1600 crore,' sources said.

Of this, it is learnt, MBS was supposed to pay Rs 150-200 crore to MMTC. ''The allegation made by the PSU is that the entire financial fraud was perpetrated in connivance with some of its employees. The matter is under investigation,'' sources said.

In fact, last week, CBI conducted raids on some jewellers in Mumbai and Surat. Unconfirmed reports suggested that agency sleuths are also understood to have conducted raids on MBS.

It is learnt that the AP unit of CBI, headed by joint firector V V Lakshminarayana, is supervising the investigation of MBS while agency units in other states are probing the role of the jewellers based there.

The MBS group had earlier come under the scanner of the Income Tax Department. It has about four showrooms in Hyderabad and one each in Vijayawada and Visakhapatnam.

Till about more than two years ago, Musaddilal Jewellers was a single group but later one of the four Gupta brothers, Prakash Gupta (Sukesh Gupta's father), separated and opened his own chain of stores naming it as MBS Group.