Mallya almost in the bag, heat on Diamond Gang
Mumbai: Emboldened by the UK Court judgement against Vijay Mallya, the Enforcement Directorate (ED) has now turned the heat on three missing diamond merchants - Nirav Modi, Mehul Choksi and Jatin Mehta.
The ED, through the Ministry of External Affairs, has decided to push the Fugitive Law against the troika who have fled from India and are based at undisclosed locations, barring Mehta who is holed up with his family in St Kitts and Nevis.
The Ministry of External Affairs, BTVI has learnt, will push the extradition process for the there. A senior official of the Ministry of External Affairs confirmed to BTVI that the process to extradite the three, will start very soon, and that New Delhi does not expect any diplomatic hurdles from countries where the three diamond merchants are currently residing. It is rumoured that both Nirav and Mehul are in Brussels, home to the world’s biggest diamond hub.
The government’s push, claim experts in Delhi, is understandable. Mehul and Nirav - investigations have proved - sold lowly synthetic diamonds as the expensive real ones, thereby fudging rates. Worse, the state-owned Punjab National Bank has informed the Reserve Bank of India (RBI) and the Finance Ministry that it would be difficult to recover the total loss of Rs 13,000 plus crore from Nirav and Mehul.
Last week, top officials of the Dubai Multi Commodities Centre have nailed Mehul Choksi by disclosing the fugitive diamond merchant’s dubious dealings across Asia. In a 125-page chargesheet submitted to a Mumbai Court, the ED explained in detail how Choksi and his brother Chetan - immediately after the ED filed a criminal complaint this February, 2018 - visited Gitanjali’s outlet in Dubai’s DMCC complex to pick up jewellery and cash.
Dion Lily White, vice president of Gitanjali Ventures DMCC, Dubai, told ED in a statement that $13 million worth of studded jewellery was in the locker, and another $3 million worth of jewellery was stored in local retail outlets in Dubai. Besides, AED 2 million was stashed in locker. ED said Chetan put “pressure on staffs to handover the said goods (jewellery) to him”. But the move failed as officials of Gitanjali Dubai - by then aware of developments in India - refused to part with the jewellery and cash. Eventually, it was left to the officers of the ED to visit Dubai it pick up the consignment.
But what shocked the ED officials was the quality of the jewellery. When the ED officials went to attach the consignment, diamond experts in Mumbai told them the booty was worth Rs 100 crore. This was not all. In the prosecution complaint, the ED says Mehul maintained poor quality of stock in his warehouses. In his Hyderabad SEZ, Mehul claimed he had jewellery worth Rs 3,840 crore, but the real value was only Rs 103 crore, less than 3 per cent of the declared value. Worse, goods from Mehul’s homes across India were initially valued at Rs 1280 crore as per the diamond merchant’s papers but valuation by ED put the value at Rs 597.75 crore, a difference of 47 percent of the total booked value.
In comparison, the ED said the real value of Nirav’s jewellery was 27 per cent of the total declared value. As per the prosecution complaint filed by ED, the proceeds of crime against Mehul is Rs 6,097 crore (Rs 3011.39 crore of LOUs plus Rs 3,086.24 crore of Foreign LoCs). Last week, the ED chargesheeted 14 accused under Section 45 of the PMLA Act, 2002. Those named in the chargesheet were Mehul Choksi, Gokulnath Shetty, Nehal Modi, Vipul Chitalia, Dharmesh Bothra, Rakesh Gajera, Sunil Varma, Deepak Kulkarni, Jayesh Shah, and others. As per the chargesheet, Mehul was the prime conspirator who shaped plans to cheat banks.
Mehul, claimed the chargesheet, used Air to Air export using his Gitanjali Group of companies in India and abroad. In short, export consignments from India to Hong Kong or from Hong Kong to India were routed through Dubai, but were not cleared through customs at UAE airport.
The chargesheet further said Mehul took undue advantage of the RBI guidelines pertaining to third party payment system against export and used his overseas entities to defraud the banks. “This system was misused to avoid detection of contra sales and purchases with the beneficiaries of LoUs and FLCs and bring back the funds directly into Gitanjali Group of companies in India,” the chargesheet said.
Mehul, claimed the chargesheet, diverted major funds to his banks through shell companies.