Special court refuses to proceed against auditor Abhishek Gupta

He appears to have reported the irregularities and non-compliance in his audit report, said the court

MUMBAI: A special PMLA (Prevention of Money Laundering Act) court has refused to initiate legal proceedings against Abhishek Gupta, the chartered accountant who claims to be the whistle-blower in the multi-crore Torres Jewellery fraud. While refusing to issue process against Gupta, the court observed that there was no material to indicate his involvement in any activity connected to the proceeds of crime.

Mumbai, India. Jan 07, 2025: Investors gathered in large numbers outside the office of Torres Jewellers in Dadar, Mumbai, demanding the return of their principal amounts after the company failed to pay the promised returns on its investment schemes. The Mumbai police booked the company's directors for committing multi-million fraud. Mumbai, India. Jan 05, 2025. (Photo by Raju Shinde/HT Photo) (Hindustan Times)

The court, on Tuesday, issued process against the remaining 12 individuals and entities named in the chargesheet by the Enforcement Directorate, which has estimated the fraud at ₹177.11 crore.

“Accused No 10, the auditor, appears to have reported the irregularities and non-compliance in his audit report,” observed special sessions judge RB Rote. Considering his limited role, the court said there are insufficient grounds to proceed against Gupta.

Advocate Mithilesh Mishra, representing Gupta, submitted before the court that he had neither participated in nor had knowledge of any alleged money laundering activities. Being a statutory auditor, he had reported the irregularities and non-compliance in the audit report, argued the lawyer.

Torres Jewellery, whose holding company was Platinum Hern Pvt Ltd, had lured small investors to buy into its fraudulent investment schemes by selling low-value, synthetic moissanite stones as high-value gemstones. It promised exaggerated returns on its investment schemes, using misleading advertisements, fake bonuses and a Ponzi scheme to entice potential victims.

The ED alleged that Gupta had failed to timely report the irregularities in the audit report to the relevant authorities. This shows that he facilitated the management of the illegal business, the agency said.

The ED filed its chargesheet on May 22, against 13 individuals and entities. It had found codes, software applications and instant messaging that the accused had used to communicate with each other, move money around, and transfer large sums to the masterminds.

The key accused in the case are: Alpesh Khara, Sagar Mehta, Oleksandr Zapichenko alias Alex, Olena Stoian, Victoria Kovalenko, Tazagul Khasatova alias Tanya, Lallan Singh, Tausif Reyaz, Abhishek Gupta and Savesh Surve.

The fraud surfaced on January 6, when investors learnt that the Ukranians who ran the Torres Jewellery stores had fled the country with their money. Soon, police in various places in the Mumbai Metropolitan Region and in Navi Mumbai registered separate cases against the jewellery store chain, the holding company, its promoters and key managerial executives.