Reports have emerged that Officials from Directorate of Revenue Intelligence have raided several traders from Zaveri Bazar, Mumbai. The primary target of this raid is supposed to one Ketan Shroff, Director of Penta Gold Ltd. According to sources, Ketan Shroff is currently on the run, and DRI officials have not been able to contact him, despite raiding his office premises and visiting his residence.
DRI officials are said to be investigating a massive customs and duty fraud by Penta Gold, and Ketan Shroff, in connivance with a few companies at Zaveri Bazar. A few companies have been asked to provide details about all their transactions with Penta Gold Ltd.
It may be recalled that DRI had earlier arrested Ketan Shroff of Penta Gold Ltd in February 2020, for his role in duty evasion of Rs. 27.50 Crores. Ketan Shroff has allegedly imported duty free gold and then diverted the said gold to domestic market, instead of exporting it, thereby causing a loss of customs duty to exchequer. ABI had published an article highlighting this on 28th Feb 2020 under the headline “DRI arrests Bullion Dealer Ketan Shroff for Import – Export Fraud, Duty Evasion of Rs 27.5 Crores.”
Apart from the above issue, DRI officials are also investigating the alleged customs and GST fraud by Ketan Shroff. It has been reported that there are strong suspicions that most of Penta Gold’s domestic sales are bogus transactions, which are done with a view to inflate turnover and profitabilty so as to avail and continue existing credit limits to the bank.
It must be noted that Ketan Shroff has listed his company, Penta Gold on NSE’s (National Stock Exchange) SME Platform. However, despite being unable to pay the loans, and seeking moratorium from the bank, and citing Covid as a reason for drop in business and drastic reduction in profitability, the company’s Stock price has increased by almost 4.5 times, from a low of Rs 16.35 in November 2020, to Rs 71 as on 12th February 2021. This increase in share price is not supported by any increase in volumes, whatsoever. As per market sources, Ketan Shroff has handed over the reigns of manipulating this stock on the exchange to a stock market operator by the name of Mr. Mohit Jain. Whatever the case may be, the increase in share price is certainly fishy, and not backed by volumes and financials, and it seems clear that stock prices are increased to take poor retail investors for a ride and for the promoters to offload their stake in the open market. SEBI and NSE should look into this for market manipulation.
Further, Ketan Shroff has filed their financials before National Stock Exchange, and as per the latest reports, the auditors claim that a stock worth massive Rs. 270 Crores, were lying with the third parties. This stock supposedly belongs to Penta Gold Ltd, however, auditors have not physically verified this stock. In absence of physical verification of such stock, it is alleged that this stock belongs merely on paper and no physical stock exists with the company. DRI officials are said to be looking into this matter as well. There is a possibility that this stock, if present would be confiscated as this gold, was not exported on time. Auditor’s complicity can also not be ruled out in this case, and whether Physical inventory was finally verified now that things are back to normal, is not known.
Reports have Ketan Shroff, has through his company Penta Gold, has also carried out numerous fictitious transactions through various companies in the market, most notably, with Shreenathji Jewels and Shreeji Jewels, belonging to one Bhupendra Thakkar. There are reports that Bhupendra Thakkar and his companies are also being investigated by Customs department for duty and GST Fraud and his office premises were raided by Customs and GST Officials earlier this week. When contacted, Bhupendra Thakkar refused to comment on this matter, and did not deny the same. As per market sources, Bhupendra Thakkar’s office premises were also visited by DRI Officials to check on his transactions with Penta Gold and Ketan Shroff, but Bhupendra Thakkar was not present at the office, and is currently on the run, avoiding DRI’s team.
As per public information, Ketan Shroff is a Director in multiple companies, that include PENTA INFRATECH PRIVATE LIMITED, PENTAX INFRAPROJECTS PRIVATE LIMITED, PENTAX PROPERTIES PRIVATE LIMITED. Incidentally, the address of all these 3 companies is listed at the same address which also happens to be the Residence address of Ketan Shroff. Dipti Shroff, wife of Ketan Shroff is also a Director in two of these companies. Incidentally, while the records show that Dipti Shroff has resigned from the Directorship of Penta Gold Ltd, Penta Gold’s website still lists her as a Director in the company.
It remains to be seen whether Ketan Shroff is finally apprehended and interrogated by DRI Officials, or whether he would continue to frustrate their attempts for investigation.
In interest of fairness and providing a balanced version of the story, ABI tried contacting Penta Gold Ltd and Ketan Shroff and other directors on the office number listed on their website as well as Ketan Shroff’s mobile number. However, all attempts to reach them were futile. This story may be updated if ABI hears from Penta Gold or its representatives to present their side of the story.