Ahmedabad: The Central Bureau of Investigation (CBI) is investigating an alleged bank fraud involving Ahmedabad-based pharmaceutical company Jay Formulations Ltd. and its promoter Ashwin Patel after State Bank of India (SBI) reported a wrongful loss of ₹57.05 crore. The agency has accused the company of obtaining credit facilities through allegedly falsified financial records and subsequently diverting the sanctioned funds.
According to the CBI, the alleged fraud involved fund-based and non-fund-based credit facilities obtained from SBI by submitting allegedly falsified books of accounts, financial statements, and supporting documents. Investigators suspect that the sanctioned funds were later diverted to other entities instead of being used for their intended purposes. Investigators claim that the company secured these facilities by submitting false books of accounts, financial statements, and supporting documents. The agency further suspects that the loan funds were diverted to other entities rather than being used for the purposes for which they were sanctioned.
As part of the investigation, the CBI conducted searches on May 21, 2026, at multiple premises linked to the company and its directors in Ahmedabad. The searches were carried out on the basis of warrants issued by a competent court in Ahmedabad. Investigators searched residential and business premises connected to the accused and reportedly seized documents relevant to the case.
Gujurat Samachar reported that searches were conducted at locations associated with the company's operations, including office and residential premises connected to the firm's management. The CBI said the investigation remains ongoing.
According to PIB, the searches covered the company's office, factory premises, and residences linked to the accused. The CBI stated that incriminating documents relevant to the investigation were recovered and seized.
The FIR names Ashwin Patel, identified as the owner and promoter of Jay Formulations, as the principal accused in the case. Investigators are also examining the roles of Rakshit Ashwin Patel, Komal Rakshit Patel, and Arjav Mahesh Patel in connection with the transactions under scrutiny.
Ashwin and Komal are residents of Mayurpankh society in the Ahmedabad's satellite area.
According to investigators, the accused allegedly obtained substantial credit facilities from SBI between 2018 and 2021 by presenting misleading financial information.
The investigators are focused on whether inaccurate financial disclosures and other alleged irregularities helped the company secure higher loan limits from SBI.
The case was registered following a complaint filed by Prakash Bisht, Deputy General Manager associated with the SBI consortium. Based on the complaint, the CBI registered a case alleging cheating, diversion of funds, and misuse of bank credit facilities.
Investigators stated that the company's loan account was later classified as a non-performing asset (NPA). The alleged outstanding principal amount linked to the account was reported to be ₹57.05 crore.
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The CBI alleges that Jay Formulations secured credit facilities by submitting false financial records and then diverted the borrowed funds instead of utilizing them for legitimate business activities. Authorities are examining financial transactions and related records to determine the flow of funds and identify any beneficiary entities.
Investigators are also reviewing company documents and banking records to assess whether there was deliberate misrepresentation of financial information during the loan approval process. The agency has not announced any arrests in the case so far.
Investigators suspect that inflated or manipulated financial records may have enabled the company to obtain higher credit limits from SBI. The agency is examining transactions to determine whether funds were routed to related entities or other beneficiaries.
The documents seized during the searches are being examined as the CBI continues its probe into the alleged diversion of funds and the role of the accused individuals. No arrests have been announced so far.
(Rh/ARC/MSM)