No case against bank officials in ₹214-cr fraud involving Winsome Diamonds: CBI

WDJL is accused of defrauding several public sector banks of around ₹4,627 crore, and the first information report (FIR) pertaining to the alleged ₹214.35-crore fraud was registered by the Central Bureau of Investigation (CBI) based on complaint by a general manager of Vijaya Bank on April 4, 2017

MUMBAI: A special court on Monday transferred the ₹214.35-crore bank fraud case against Winsome Diamonds and Jewelleries Ltd (WDJL) to a metropolitan magistrate court as the Central Bureau of Investigation (CBI) did not find any incriminating material against any bank official in the case. The magistrate court will now take cognisance of the remaining charges of cheating and conspiracy.

No case against bank officials in ₹214-cr fraud involving Winsome Diamonds: CBI

WDJL is accused of defrauding several public sector banks of around ₹4,627 crore, and the first information report (FIR) pertaining to the alleged ₹214.35-crore fraud was registered by the Central Bureau of Investigation (CBI) based on complaint by a general manager of Vijaya Bank on April 4, 2017.

The FIR – one of 12 against WDJL – was registered under sections 120B (criminal conspiracy), 420 (cheating) and sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988, against the company, its promoters, directors and unknown bank officials.

According to the FIR, the accused persons hatched a criminal conspiracy in 2012-13 and defrauded Vijaya Bank of ₹214.35 crore via eight standby letters of credit (SBLCs) issued to overseas bullion banks, like Bank of Nova Scotia, London and Standard Chartered Bank PLC, London.

The CBI had filed a plea before the special court, saying it did not during its probe find any case under the Prevention of Corruption Act against any public servant or bank official. Hence, the charge sheet would now be filed against private persons, the CBI said, and urged the special court to transfer the case record to the esplanade metropolitan magistrate court.

Special judge Dr. JP Darekar accepted the argument and ordered the sessions court registrar to transfer the case FIR along with related documents to the chief metropolitan magistrate, Esplanade for further processing of the case.

According to investigating agencies, WDJL obtained huge loans from public sector banks 2008 onwards for importing gold and diamonds, but the company’s management resorted to the round-tripping of these goods by trading with 13 firms based in the United Arab Emirates (UAE) that were fully under its control. The money received by the UAE-based companies was siphoned off, funds were layered by routing through bank accounts in multiple countries, and some funds were accumulated in the bank accounts of firms controlled by the family members of Jatin Mehta, a fugitive diamantaire and WDJL’s promoter.