Bhopal, Mar 16 (PTI) The Enforcement Directorate on Monday said it has arrested the owner and MD of a Madhya Pradesh-based food company for allegedly selling "adulterated" dairy products.

Kishan Modi of Jayshri Gayatri Food Products Pvt. Ltd. (JGFPPL) was taken into custody on March 13. He was produced before a special Prevention of Money Laundering Act (PMLA) court in Bhopal on March 14 which sent him to ED custody until March 18, the federal agency said in a statement.

The ED said the company supplied dairy products under the brand name 'Milk Magic' and was allegedly involved in manufacturing adulterated dairy products by substituting milk fat with palm oil and other harmful chemicals.

These products were not only supplied in domestic market but were also exported to various countries, it said.

The agency said that to facilitate such exports, "forged" laboratory test reports from reputed laboratories were submitted to the Export Inspection Agency (EIA) in Indore to obtain export clearance.

According to the ED, many such reports were "forged" and the laboratories concerned had not issued them.

The company allegedly laundered funds worth Rs 20.59 crore through this alleged illegal activity, the agency said.

The money laundering case stems from an August 2023 FIR filed by the Bhopal Police against the company and its promoters. PTI NES DV DV

Money laundering probe leads to arrest of food company promoter over alleged dairy product adulteration and forged export test reports. Enforcement alleges the company manufactured and distributed adulterated dairy products by substituting milk fat with palm oil and other chemicals, supplied domestically and exported. Investigators allege multiple forged laboratory test reports were submitted to obtain export clearances while laboratories deny issuing them. The probe, which follows a local police complaint, targets proceeds from these activities as money laundering and has resulted in custodial remand of the company's principal for further PMLA investigative measures.