ED raids 21 more places in 11K cr PNB fraud case

Source: The Hitavada      Date: 18 Feb 2018 08:23:02



Feb 17,


RAIDS by the ED in connection with its money laundering probe against diamond czar Nirav Modi and others in the alleged Rs 11,400-crore bank fraud continued for the third day on Saturday with the agency saying it seized Rs 25 crore worth diamonds and jewellery, taking the total seizure value to Rs 5,674 crore.“The ED conducted further searches at 21 locations across India in Nirav Modi case and seized diamonds, gold, precious stones/metals and jewellery worth Rs 25 crore (book value). The total seizure till now is Rs 5,674 crore,” it said in a statement.

The agency had earlier said it had arrived at the value of the assets seized based on the stock value at showrooms and stores, which was also the price at which the company purchased the goods. It was also conducting an “independent valuation” of these assets.The Enforcement Directorate had on Friday summoned Nirav Modi and his business partner and jewellery chain promoter Mehul Choksi in this case. They have been asked to appear before the Investigating Officer of the case at the ED office in Mumbai on February 23. 

According to the Central Bureau of Investigation, Nirav Modi and Choksi left the country in January, before an FIR was registered in the Punjab National Bank fraud case.The raids that began on February 15 are expected to continue on Sunday, ED officials said.ED sleuths are also in touch with a former Government-nominated director of a state-owned bank, who was a reported whistleblower in this case, as part of its investigation, they said. The agency also filed a fresh money laundering case on Friday, taking cognisance of a new CBI FIR against Choksi and his companies.

CBI arrests two PNB officials, searches Brady Road branch


Feb 17,


THE CBI on Saturday arrested three people -- a retired and a serving officials of Punjab National Bank and an executive of Nirav Modi’s company -- in connection with the alleged Rs 11,400-crore fraud, and carried out searches at the Brady Road branch of the bank in Mumbai, officials said.
The bank branch, which is in the centre of one of the biggest financial scams of the country, was searched by the agency, the sources said, adding that “incriminating documents” related to the case were recovered.

The officials at the branch were asked by CBI sleuths about the process of sending Swift messages -- notifications sent by banks to transfer funds internationally, and the functioning of internal software of the bank, they said.The agency has taken into custody retired deputy manager of the bank Gokulnath Shetty, single-window operator Manoj Kharat, and Hemant Bhat in connection with its FIR registered on January 31 against Nirav Modi, his companies and business partner and uncle Mehul Choski, they said. 

A special court in Mumbai remanded three persons arrested in the scam in a 14-day custody of the Central Bureau of Investigation (CBI), saying the scam has “consequences for the economy of the nation”. The CBI told the court that it suspects the involvement of more PNB officials, and diamond trader Nirav Modi, who is at the centre of the scam, fled the country before the bank could lodge a complaint. Also, it has yet to unearth the larger conspiracy, exact magnitude of the scam, identity/roles of other accused and the end-use of the public funds diverted in the scam, the agency said. The CBI is also questioning six officials of the bank, they said. The FIR initially listed eight fraudulent transactions worth over Rs 280 crore, but based on further complaints from the bank, the CBI now says the amount investigated in the first FIR is over Rs 6,498 crore, involving 150 Letters of Understanding (LoUs) allegedly fraudulently issued by Shetty and Kharat.

The remaining 143 fraudulent LoUs worth over Rs 4,886 crore issued for Gitanjali Group are part of the second FIR registered by the agency against Choksi and his companies Gitanjali Gems, Nakshatra Brands and Gili, they said.All these LoUs were issued or renewed during 2017-18, the officials said.An LoU is a letter of comfort given by a bank, a kind of guarantee, to a foreign branch of an Indian bank on behalf of its client allowing him to raise money from that bank for short-term credit.

I-T attaches 9 bank accounts of Choksi, Gitanjali Gems


Feb 17,


THE Income-Tax Department on Saturday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them.The Department issued orders for provisional attachment of these accounts in various bank branches in Mumbai under the provisions of the Income Tax Act, 1961. There are around Rs 80 lakh in these accounts, official sources said.They said the action was taken to “recover outstanding tax demands”.

The accounts, according to an I-T document accessed by PTI, are in the names of Gitanjali Gems Limited (three accounts), Mehul Choksi (3 accounts), Nakshatra World Limited (one account) and Ms Gili India Limited (2 accounts).The I-T Department tester had initiated action against beleaguered diamond jewellery designer Nirav Modi and provisionally attached 29 properties and 105 bank accounts of him, his family and firms as part of its tax evasion probe, officials said.The department also slapped the new Anti-Black Money Act against him for allegedly holding illegal assets abroad.

Under the new anti-black money law cases of overseas illegal assets, which till recently were probed under the regular and civil Income Tax Act of 1961, attract a steep 120 per cent tax and penalty on undisclosed foreign assets and income besides carrying a jail term of up to 10 years.The taxman also filed a charge sheet against Modi before a special court in Mumbai under sections 276 C (1) [willful attempt to evade tax], 277 A (false statement in verification), 278 B (offences by companies) and 278 E (presumption as to culpable mental state) of the Income Tax Act. The court will take up the case on February 27.