The major chunk of Indian textile and apparel industry follows all kinds of compliance norms and works ethically. However, from time to time, some cases keep making headlines, shaming the industry. Just a few days back, The Directorate of Revenue Intelligence (DRI) arrested a person – Zahid Ali, from Mumbai, for fraudulently claiming export incentives of Rs. 52 crore and during the investigation, it came to light that the crime was related to the same group that was arrested in March.
The syndicate procures cheap carpets and garments from different people and shows purchase through fake bills by the overvaluation of the same; to get more drawbacks, the caucus was procuring cheap garments and carpets from India by showing inflated purchase bills to get duty drawback benefits.
In another case also from Mumbai, the Central Bureau of Investigation (CBI) was investigating a Rs. 65 crore bank fraud allegedly committed by a textile company (name has not been disclosed) that took credits from a nationalised bank but defaulted on repayments. The firm had taken loans from the bank between 2011 and 2012. The loan amount later turned into non-productive assets (NPA). This matter was heard at Mumbai Debts Recovery Tribunal, and the forensic audit report accused the defaulter firm of irregularities like misappropriation of funds or diversion of funds via several shell firms into real estate firms of those known to the company’s officials. Such cases of diversion and misappropriation of the loan are also another popular way of scam.
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