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Mehul Choksi owes ₹6,086.29 crore to 34 other Indian banks, says ED

Amounts Choksi owes to these banks are in addition to Rs7,080.86 crore, which he allegedly siphoned from Punjab National Bank.

mumbai Updated: Jul 04, 2018 15:23 IST
Pratik Salunke
Pratik Salunke
Hindustan Times
Mumbai,PNB fraud,Punjab National Bank
Mehul Choksi’s whereabouts are unknown since he fled the country in January 2018. (HT File Photo)

Mehul Choksi, whose whereabouts are unknown ever since he fled the country in January 2018 after being accused of cheating Punjab National Bank (PNB), had taken loans from 34 other public and private sector banks in India and owes them more than ₹6,086 crore as of December 31, 2017.

According to a charge sheet filed by the Enforcement Directorate (ED) before the special Prevention of Money Laundering Act Court in Mumbai on June 28, Choksi overvalued gems and used subsidiary companies to rotate goods and funds, in order to show an inflated turnover for his Gitanjali Group of companies.

The charge sheet states that Choksi, through his firm Gitanjali Gems Limited, had taken loans to the tune of ₹4,889.01 crore from 33 banks and loans adding up to ₹377.14 crore from another bank through Gili India Limited.

He further used his companies Nakshatra Brands Limited and Asmi Jewellery India Limited to secure loans worth ₹434.12 crore and ₹386.02 crore respectively from different banks.

The amounts Choksi owes to these 34 banks are in addition to the ₹7,080.86 crore, which he allegedly siphoned from Punjab National Bank using fraudulent letters of undertaking (LoU) and foreign letters of credit (FLC).

The ED has said in the charge sheet that Choksi created 38 companies as subsidiaries or step-down subsidiaries of his companies in India, as well as 16 more companies, like Crown Aim Limited and Shanyao Gong Si Limited in Hongkong, Abbeycrest (Thailand) Limited, Al Arbaa Jewells FZE and Al Burj Diamond And Jewellery FZE in UAE, and M/s Samuel Jewellers and M/s Diamlink Jewellery in USA.

According to ED, the companies were floated either to receive the proceeds of crime or were used for layering, siphoning and parking of funds.

Choksi used at least 12 market operators in Dubai to camouflage the source of funds on commission basis, says the charge sheet.

Nehal Modi (Nirav Modi’s step brother) was in charge of the USA-based companies, Samuels Jewelers Inc and Diamlink Inc, and received proceeds in the guise of royalty agreements with Choksi’s Dubai-based companies.

The charge sheet also states that Choksi overvalued jewels, diamonds and precious stones, the import and export of which, was planned and executed by Choksi himself along with vice president Vipul Chitaliya and head of international business, Sunil Varma.

Evidence for the overvaluation includes an email from October 2015, written by Jitendra Mahajan, director of Gitanjali Ventures DMCC in UAE – a firm floated by Choksi – to Chitalia complaining about the “low quality” of “color stones consignments”. Mahajan’s email goes on to say, “We apprehend that in surprise check if customs in Dubai/India open the parcel…the Company would be heavily penalised.”

Choksi and his nephew, Nirav Modi, left India in January 2018 after PNB alleged the two had cheated the bank of ₹13,600 crore.

Choksi’s advocates have moved the special Central Bureau of Investigation court in Mumbai to cancel the warrants issued against their client in April and May. Choksi has said he is not returning to India because he fears he will be a victim of the recent trend of mob lynching in the country.

First Published: Jul 04, 2018 11:48 IST