Bhopal PMLA Court Grants ED Custody of Kishan Modi in Money Laundering Probe
(By Syed Ali Taher Abedi)
In a significant development in an ongoing financial crime investigation, the Directorate of Enforcement (ED), through its Bhopal Zonal Office, has arrested Kishan Modi on 13 March 2026 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The arrest was affected under Section 19(1) of the Act in connection with a money laundering investigation linked to Jayshri Gayatri Food Products Pvt. Ltd. (JGFPPL) and other associated entities.
Following his arrest, Modi was produced before the Hon’ble Special Court (PMLA) at Bhopal on 14 March 2026.
After hearing submissions made by the investigating agency, the Court granted custodial remand to the Enforcement Directorate until 18 March 2026 to facilitate further interrogation and investigation under the provisions of the PMLA.
Background of the Case
The ED’s money laundering investigation stalks from predicate offences registered by local law enforcement agencies.
The probe is based on FIR No. 0492/2023 dated 29 August 2023 registered at Habibganj Police Station, Bhopal, and FIR No. 0027 dated 22 July 2024 registered by the Economic Offences Wing (EOW) under various provisions of the Indian Penal Code (IPC) against the directors and officials of M/s Jayshri Gayatri Food Products Pvt. Ltd.
These FIRs alleged serious irregularities and fraudulent practices in the manufacturing and export of dairy products marketed under the brand name Milk Magic.
Allegations of Adulteration and Fraudulent Certification
According to the Enforcement Directorate’s investigation under the PMLA, M/s Jayshri Gayatri Food Products Pvt. Ltd. is suspected to have been involved in the manufacture and distribution of adulterated dairy products. Investigators allege that the company substituted milk fat with palm oil and other potentially harmful chemical substances, thereby compromising product quality and consumer safety.
The allegedly adulterated products were not confined to the domestic market alone but were also exported to several foreign destinations.
To facilitate these exports, the company is alleged to have submitted forged laboratory test reports purportedly issued by reputed testing laboratories to the Export Inspection Agency (EIA), Indore, which is responsible for certifying goods for export.
However, subsequent verification conducted by investigators with the concerned laboratories reportedly revealed that several of the submitted test reports were fabricated and had never been issued by the laboratories in question.
Proceeds of Crime Identified
The ED’s investigation further revealed that on the basis of these allegedly forged laboratory certifications, the company exported adulterated dairy products and received substantial export proceeds.
These proceeds were credited into bank accounts maintained by the company with Axis Bank and HDFC Bank.
Preliminary financial analysis conducted by the agency indicates that export proceeds amounting to approximately ₹20.59 crore were generated through exports backed by the forged laboratory reports.
The Enforcement Directorate has identified this amount as “Proceeds of Crime” under the provisions of the PMLA.
Continuing Investigation
Officials stated that the custodial interrogation of the arrested accused is expected to assist investigators in unravelling the wider financial trail, identifying additional beneficiaries, and establishing the full extent of the alleged laundering network linked to the export of adulterated dairy products.
The Enforcement Directorate has confirmed that further investigation in the matter is presently underway, and additional action may follow as the probe progresses.
