ED also pointed to a 2014 case booked by the Direct-orate of Revenue Intellig-ence.
Mumbai: The Enforcement Directorate (ED) in its recent charge-sheet against fugitive jeweller Nirav Modi has said that initially, the letters of undertaking (LoUs) were allegedly issued for a smaller duration i.e. 90 days, which was later increased to 360 days to gain maximum benefit out of these dealings. Also, repayment of earlier LoUs was made either by diverting money received from other LoUs or by creating more and more LoUs.
According to the charge-sheet, default in repayment of LoUs occurred in 2018, when LoUs (issued for 360 days) matured and payment became due to PNB from these firms owned by Nirav Modi. At that time, the firms approached PNB for issuance of new LoUs. However, the scam that was unfolding since 2011 came to the notice of PNB only when it did not issue fresh LoUs in the absence of requisite documents and sanctions.
The ED investigation has found that many companies based in Hong Kong and UAE were nothing but dummy companies opened at the behest of Nirav Modi. “These companies had no genuine business and were only paper companies used for rotation of funds. These companies were formed only in order to facilitate layering, and for laundering of funds obtained fraudulently from PNB, and to camouflage the real usage and identity of beneficiaries of the funds siphoned off,” read the charge-sheet.
On the basis of statements of dummy directors and associated persons, the ED has said, “The jewellery thus received in these firms was disassembled, diamonds and precious stones were extracted, gold thus obtained was melted and converted into bullion, and the same gold and diamonds were again circulated.”
ED also pointed to a 2014 case booked by the Direct-orate of Revenue Intellig-ence, Mumbai, for wrong declaration of the consignment of “diamond-studded gold jewellery” being exported in the name of Firestar Diamond Interna-tional Pvt. Ltd. and Fires-tar International Pvt. Ltd., both SEZ units located in Surat and owned by Modi. The consignment was found to be highly overvalued, so much that the government-approved valuer declared the diamonds studded on gold bangles as being “dead diamonds”.