The Enforcement Directorate today said it has seized over 34,000 pieces of jewellery worth ₹85 crore from the Gitanjali Group, owned by diamantaire Mehul Choksi, in connection with the ₹13,000-crore Punjab National Bank (PNB) fraud case.
The jewellery was kept at the premises of the Gitanjali group firm, Ms Gitanjali Ventures DMCC in Dubai, and was seized under the Prevention of Money Laundering Act (PMLA) when it was “brought” to Mumbai, the agency said in a statement.
It said the seizure of gold and silver jewellery was made on May 10 after the ED raided a strong-room belonging to Bharat Diamond Bourse.
“The ED seized over 34,000 pieces of jewellery worth ₹85 crore under the PMLA of Mehul Choksi-controlled Gitanjali Group brought from Dubai,” it said.
Choksi, along with his nephew and millionaire designer jeweller Nirav Modi, is being investigated by the ED for allegedly defrauding PNB, the country’s second largest lender.
Both Modi and Choski are said to have left the country before criminal cases were lodged against them.
The statement said the agency’s probe against Choksi allegedly found that the “proceeds of crime generated out of the criminal act of cheating and conspiracy have been siphoned off by the accused persons and some part of it has been amalgamated in business of the company and is being projected as untainted property”.
{{/usCountry}}The statement said the agency’s probe against Choksi allegedly found that the “proceeds of crime generated out of the criminal act of cheating and conspiracy have been siphoned off by the accused persons and some part of it has been amalgamated in business of the company and is being projected as untainted property”.
{{/usCountry}}The remaining amount of the proceeds of crime has been siphoned off and parked out of India, in the companies/entities of the accused persons located in different countries, it claimed.
The agency said the data obtained from PNB found that with the “connivance of accused bank officials, unauthorised LOUs (letters of undertaking) aggregating to ₹3,032.17 crore and unauthorised FLCs (foreign letters of credit) aggregating to ₹3,106.56 crore were issued to the Gitanjali group of companies”.
The funds so raised for payment of import bills have “not been utilised” for such purposes in many cases, it alleged.
The agency claimed it has detected that the Gitanjali group had many overseas subsidiaries or dummy companies which were “used by him (Choksi) for circular trading”.
“He had devised a modus operandi under which the Indian entities of Choksi were importing the unfinished goods/raw material like diamonds, colour stones, pearls among others from his overseas entities situated mainly in Hong Kong and the UAE.
“The same goods were shown to be processed and made into jewellery and again exported by the Indian entities of Choksi to his overseas entities,” the ED alleged.
The ED claimed it “appears” to it that in the name of export and import, Choksi, through his various companies in India and abroad, was involved in money laundering and goods like studded jewellery, precious and semi-precious stones among others that were imported and exported through these companies have been procured/manufactured by the “ill-gotten money”.
Choksi, Modi and others are being investigated by the ED as well as other probe agencies after the fraud case was registered this year following a complaint by PNB that they allegedly cheated the nationalised bank to the tune of over ₹13,000 crore, with the purported involvement of a few employees of the bank.
The Central Bureau of Investigation and the ED have registered two FIRs each in this case.
The CBI this week filed two charge sheets in the case before a Mumbai court while the ED is expected to file its own prosecution complaint soon.
The ED complaint or charge sheet will focus on the money laundering aspect and the role played by the accused in perpetrating the alleged fraud, officials said.