Mumbai: The Enforcement Directorate (ED) on Thursday chargesheeted fugitive diamond businessman, Mehul Choksi, and 13 others, including five firms, in its money-laundering probe related to the Punjab National Bank (PNB) fraud case. ED has alleged that Mr Choksi and the other accused had cheated the bank to the tune of over Rs 6,000 crore in connivance with a few bank officials by fraudulently getting the Letters of Undertaking (LOUs) /Foreign Letters of Credit (FLCs) issued without following prescribed procedures and caused a wrongful loss to the bank.
The probe revealed that Mr Choksi had allegedly indirectly used a portion of the fraudulently-availed funds from LoUs and FLCs to invest in his companies in India through certain individuals and companies under the scanner, said an ED source. In one such transaction, Eternity Jewels FZE, a shell firm allegedly controlled by Mr Choksi, had transferred such funds to an individual in the guise of a loan that was later used to purchase the equity of Gitanjali Gems Ltd, the source said. In another case, according to the ED, the shares of an Indian firm were purchased by a jewellery firm via Dubai-based shell firm, Al Burj Diamond and Jewellery, for Rs 9.78 crore.
According to ED, a portion of the funds obtained from LoUs and FLCs was also allegedly remitted back to Choksi's Gitanjali Group Companies in India in the garb of export-import transactions. The agency also found that goods exported from India were allegedly of “abysmally low quality but the value was highly inflated”, said the source. The valuation of the export/import goods was used to be decided by the accused. “The remittances received in India were again spread among group companies and other Indian firms for settling earlier liabilities of FLCs and LOUs at PNB,” the source said. Another portion of funds obtained via the LoUs were siphoned off through their alleged overseas suppliers.
The 14 accused, including the firms, were charged under the Prevention of Money Laundering Act. The ED probe was initiated on the basis of a Central Bureau of Investigation fraud case registered on February 16 under sections pertaining to the Indian Penal Code and the Prevention of Corruption Act.