Ahmedabad police are investigating a significant financial fraud involving Citadel Textiles, a local denim fabric supplier, which was cheated out of Rs. 1.77 crores by two businessmen based in Delhi. The incident came to light in late April 2024 after Citadel Textiles filed a formal complaint with the Ahmedabad Crime Branch, citing unpaid dues despite substantial credit sales.
What Happened — Full Details
Citadel Textiles, headquartered in Ahmedabad’s Textile Market area and managed by directors Mishal Parikh and Tejas Patel, extended credit totaling Rs. 14.48 crores to two Delhi-based companies: Best Polykem Pvt. Ltd. and Shesh Enterprises. Best Polykem received denim fabric valued at Rs. 9.68 crores and has paid Rs. 9.59 crores, leaving an outstanding balance of Rs. 8.37 lakhs. Shesh Enterprises purchased fabric worth Rs. 4.80 crores but defaulted on Rs. 1.68 crores after paying Rs. 3.12 crores.
These transactions, spanning from December 2023 to March 2024, were primarily conducted on credit, relying on trust between the businesses. The failure to clear dues has severely impacted Citadel Textiles’ cash flow and operations.
Who Was Accused
The two businessmen implicated are the directors of Best Polykem Pvt. Ltd. and Shesh Enterprises, both registered companies located in New Delhi’s industrial corridors. Their identities have been disclosed to Ahmedabad police but remain confidential pending further investigation. No arrests have been made yet, as the Crime Branch continues to gather evidence.
Investigation and Legal Proceedings
The Ahmedabad Crime Branch Economic Offences Wing (EOW) registered FIR number 0423/2024 under sections 420 and 406 of the Indian Penal Code at the Sola Police Station. A special investigation team has been formed to probe the fraudulent transactions and trace the outstanding payments. Investigators are coordinating with Delhi police to verify company records and financial statements.
Citadel Textiles has also approached the Ahmedabad Civil Court seeking recovery of dues through legal channels. Meanwhile, the Crime Branch advises other textile traders to exercise caution in extending credit to new or unverified clients.
Background and Prior Incidents
This fraud adds to a growing trend of financial scams affecting Ahmedabad’s textile industry, a key pillar of the local economy. In 2023, over 4,000 investors were duped in a pump-and-dump scam based in Ahmedabad’s business district. Additionally, the Crime Branch has reported several cases of fraudulent credit card and online scams targeting local traders and residents. These incidents underscore the vulnerabilities in business credit practices and the urgent need for stricter regulatory oversight.
Official Response and Community Impact
Ahmedabad Crime Branch officials have highlighted the establishment of a dedicated economic crimes cell to streamline complaint registration and expedite investigations. However, some local traders have expressed frustration, citing difficulties in complaint acceptance without specific references or prior documentation.
The textile community in Ahmedabad, especially in districts like Sabarmati and Maninagar, is closely monitoring the case, urging the government and law enforcement agencies to implement stronger safeguards against fraudulent credit practices. The Gujarat Textile Manufacturers Association has proposed mandatory credit verification protocols for inter-state transactions and greater collaboration between states to prevent similar scams.
Meanwhile, the Gujarat government is expected to issue new guidelines for textile traders by mid-2024 to improve financial transparency and support affected businesses.
For traders looking to travel or expand their business networks, the recently announced New Special Trains from Ahmedabad to Mumbai and Delhi offer improved connectivity, but also call for heightened vigilance in credit dealings.
Bottom Line: The Rs. 1.77 crore fraud case involving Ahmedabad’s Citadel Textiles highlights the critical need for robust credit verification and legal recourse for textile traders. Businesses must remain vigilant and promptly report defaults to authorities to safeguard Gujarat’s textile industry.