The Enforcement Directorate (ED) has said it has arrested Sanjay Agarwal, managing partner of Ghanshyamdas Gems and Jewels, a Hyderabad-based gems and jewellery firm, in a money laundering case linked to an alleged bank loan fraud of Rs 67 crore.

Agarwal was produced before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad on February 11 and the court remanded him to 15 days of judicial custody.

Ghanshyamdas Gems and Jewels is engaged in wholesale trading of gold.

Agarwal was already lodged in a Kolkata jail after the ED had arrested him in another money laundering case linked to alleged diversion of duty-free export bound gold in the domestic market.

The latest case, the agency said in a statement, is related to a “loan fraud case in which the State Bank of India (SBI), Hyderabad, suffered a loss of Rs 67 crore. A probe found that in 2010-2011, Agarwal fraudulently procured gold bullion from SBI by producing fake and forged bank guarantees and covering letters purportedly issued by PNB and sold the gold bullion in the local market to various jewellers and small traders in cash.” The cash was “diverted” to several other firms floated by Agarwal in the name of his wife, brothers and his employees, it alleged.

“Later, after default on the gold loan happened, the SBI found that the bank guarantees and letters were forged,” the agency said.