An ED investigation has found that absconding jeweller Mehul Choksi diverted over Rs 3,250 crore funds, allegedly defrauded from a PNB branch in Mumbai, to foreign shores and he was in business of “highly inflating” prices of precious metals sold from his outlets. The businessman has rejected the charges as “baseless”.
The agency, which is probing the $2 billion alleged bank fraud that also involved his nephew Nirav Modi, said Choksi was “using several dummy companies” to rotate funds and to divert money for his personal use.
In its chargesheet, the Enforcement Directorate has said Choksi allegedly diverted $56.12 million of loan funds to Nirav Modi and about $50 millionto Modi’s father Deepak Modi.
“Choksi was using several dummy companies for rotating his transactions. Under this arrangement, origin of the sale transactions and final destination used to be any of the Gitanjali group of companies.
“For in-between transactions, dummy companies were used for layering purpose wherein only sale/purchase bills were created and no movement of goods used to take place. He has been doing this to project inflated turnover to avail higher banking facility,” the Enforcement Directorate (ED) has said in its charge sheet filed against the absconding businessman who is stated to be in the caribbean nation of Antigua now.
Choksi, talking to some media organisations, has termed ED’s allegations as “false and baseless”. He has also alleged that this property have been attached by the central probe agency “illegally.”
The agency said it has detected that funds to the tune of Rs 3,257.54 crore, that were obtained from PNB’s Brady House branch in Mumbai, were “diverted” to countries like Thailand, the US, Belgium, UAE, Italy, Japan and Hong Kong and were deposited in “group entity” firms.
These funds, it said in its probe report accessed by PTI, were “fraudulently obtained” by Choksi and his firms from the PNB by way of Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs).
It also accused Choksi of grossly over-valuing the gems and jewellery that he sold.
The businessman has been also charged by the CBI for alleged corruption in this case and the ED has sought an Interpol arrest warrant against him apart from approaching a Mumbai court to get him declared a fugitive economic offender under a new law by the same name.
India has also recently moved for his extradition from Antigua.