Mumbai/Jalandhar: A major financial fraud linked to Punjab’s rice trading and export sector has come under the scanner after authorities uncovered a massive banking scam worth ₹350.84 crore, sending shockwaves through the banking system. The Enforcement Directorate (ED), Jalandhar Zonal Office, has taken significant action against Punjab Basmati Rice Limited and its promoters-directors, including Kulwinder Singh Makhni and others.
ED Searches Six Premises
The ED conducted coordinated search operations on June 5, 2026, at six residential and commercial premises associated with the company and its key individuals. The action was initiated based on an investigation stemming from an FIR registered by the Central Bureau of Investigation (CBI), New Delhi. According to officials, the company allegedly defrauded a consortium of public sector banks led by Canara Bank, causing massive financial losses.
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Investigators have found that Punjab Basmati Rice Limited allegedly created fake debtors and manipulated sales records to secure large-scale loans from the banking consortium. The company is accused of showing fictitious stock sales and routing transactions through multiple shell entities to project inflated business activity and financial health.
Fake Debtors Under Scanner
The probe further revealed that the funds obtained from banks were systematically diverted through layered transactions and ultimately used for personal gains by the promoters and associated individuals. Authorities believe that instead of being used for genuine business operations, the loan proceeds were siphoned off through complex financial channels, causing direct losses to public sector banks.
During the raids, ED officials recovered crucial documents, electronic devices, and financial records that are now being examined as part of the ongoing investigation. In addition, ₹8.50 lakh in cash and USD 8,600 were also seized from the premises, providing important leads to trace the money trail and uncover further layers of the alleged fraud.
Shell Companies Allegedly Used
Officials stated that the entire network appeared to be carefully structured, with shell companies playing a key role in masking fraudulent transactions. These entities were allegedly used to create fake sales and receivables, thereby misleading banking systems and bypassing financial scrutiny mechanisms.
The investigation has also highlighted concerns over how loan funds were diverted away from legitimate trade activities and instead routed through multiple accounts and entities to conceal their origin and usage. ED is now examining whether the money trail extends beyond state borders and possibly involves offshore transactions.
Banking Oversight Questions Rise
Experts in the banking sector note that such cases expose serious gaps in corporate lending oversight and credit verification systems. When fake debtors and shell companies are successfully used to manipulate financial statements, it can severely compromise the integrity of banking institutions and risk public money.
The investigation is still ongoing, with ED intensifying scrutiny of assets, bank accounts, and business networks linked to the accused. Officials have indicated that more revelations are likely in the coming days as the financial trail is further decoded, potentially uncovering deeper layers of the fraud network.
