Choksi diverted over Rs 3,250-cr to foreign shores, sold jewellery at inflated prices: ED

Agencies
September 12, 2018

New Delhi, Sept 12: 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 (about Rs 13,000 crore) 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 (about Rs 400 crore) of loan funds to Nirav Modi and about $50 million (Rs 360 crore approx) to 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 properties 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.

"Choksi used to fix the rate/value of the goods without applying economic rationale. The goods in question were either low value or poor quality and was not commensurate with the price/value fixed by him," the ED said.

The charge sheet further said these charges have been "confirmed" in the statement given to it under the Prevention of Money Laundering Act (PMLA), by Vice President (banking operations) of Choksi's Gitanjali Group, Vipul Chitalia.

"It is further confirmed from the goods seized at Hyderabad whose declared value was found to be highly inflated and in some cases the actual value of these goods is even less than 3 percent of the declared value," the ED said.

The agency alleged the proceeds of crime of money laundering in this case involving Choksi were "partly remitted back to Gitanjali group of companies" in India in guise of export-import transactions for settling earlier credit liabilities.

"The proceeds of crime has also been used for making payment against the villa booked by Choksi in UAE and for transferring preferential shares of MS Bezel Jewellery (India) Pvt Ltd to Ms Al Burj Diamond and Jewellery FZE, UAE...," the charge sheet said.

It also charged Choski of conducting illegal 'air to air' export using the Gitanjali group, where consignments exported from India to Hong Kong and back were routed to Dubai but were not cleared through customs at the UAE airport and were exported to Hong Kong or India.

The ED report also said that "fraudulent export and import" was being done by Choksi's firms and there was "no manufacturing activity" in any of the overseas companies situated at Hong Kong and the UAE and only bogus business and sale amongst group companies were carried out.

"The export/import was also not genuine and was just rotational transactions. The jewellery exported from India was dismantled and diamonds/pearls were taken out of it," the agency charged.

The ED said, "It is apparent that the funds acquired by fraudulent means were siphoned off within the country as well as to the overseas dummy companies owned and controlled by Mehul Choksi himself."

"The dummy directors and others were mechanically transferring the goods and monies as per the directions of Choksi without any economic rationale and logic," the agency alleged.

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.

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News Network
February 26,2020

Feb 26: In his first reaction to incidents of violence in Delhi which have left at least 20 people dead, Prime Minister Narendra Modi on Wednesday appealed for peace and brotherhood, and said he has held an extensive review of the prevailing situation in various parts of the national capital.

He also said it was important that calm and normalcy was restored at the earliest.

“Had an extensive review on the situation prevailing in various parts of Delhi. Police and other agencies are working on the ground to ensure peace and normalcy,” Modi tweeted.

Stressing that peace and harmony are “central to our ethos”, Modi said, “I appeal to my sisters and brothers of Delhi to maintain peace and brotherhood at all times.”

At least 20 people have been killed since Sunday in communal violence in Northeast Delhi, triggered after clashes between pro and anti-CAA protestors over the Citizenship (Amendment) Act.

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News Network
January 31,2020

Jan 31: Twenty-three children aged between six months and 15 years, who had been taken hostage by a murder accused after inviting them to his daughter's birthday party, were rescued late on Thursday night after police killed their captor in a village here.

The hostage drama began at Kasaria village in the afternoon and continued for about eight hours.

"The accused was killed and there were about 23 children who were rescued safely," Additional Chief Secretary (Home) Awanish Awasthi told reporters at a hurriedly called press conference at 1.20 am.

"The accused had invited the children for the birthday party of his daughter and held them hostage. It started about 5.45 pm on January 30 and continued for about eight hours," Director General of Police (DGP) O P Singh said, adding that in the entire operation they had tried to "engage" the accused and were successful.

He said the accused, identified as Subhash Batham, had initially released a six-month-old girl by handing her over to his neighbour from a balcony.

Eyewitnesses said a restive crowd gathered outside the house where the children were kept with some women wailing and praying for their safe release.

The crowd broke open the door of the house to rescue the children, they said.

As the accused opened fire, the police retaliated killing him on the spot.

In the exchange of fire, the captor's wife was injured, but none of the children suffered any injury.

A man and two policemen also suffered bullet injuries.

The motive of the accused was not known immediately.

Chief Minister Yogi Adityanath monitored the situation in Farrukhabad, which is nearly 200 km from state capital Lucknow.

"The CM as soon as he got to know about the incident called a meeting of the crisis management group and personally monitored the situation and ensured children are rescued safely," Awasthi said.

Earlier, a team of NSG (National Security Guard) commandos had taken a special aircraft to reach Farukhabad, a senior security official in Delhi said.

Police said Batham, a murder accused, seemed to be mentally unstable.

Inspector-General of Police, Kanpur Range, Mohit Agarwal, said, "The man called the children for a birthday party and held them hostage in the basement of the house. He fired six shots from inside the building."

Batham initially wanted to talk to the local MLA, but refused to speak to the leader when he arrived, Agarwal said.

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February 4,2020

Feb 4: Americans on Monday kicked off the first vote of the 2020 presidential race as the midwestern state of Iowa began its caucuses, the closely-watched first step in deciding which Democrat will face incumbent Donald Trump in November's election.

The two frontrunners, left-wing Senator Bernie Sanders and former Vice President Joe Biden face a key test in the sparsely populated state, with a handful of others looking to make their mark to give their campaigns momentum.

The Iowa vote is a critical early look at the viability of the 11 Democratic candidates still in the race - even though just 41 Iowa delegates are up for grabs, a fraction of the 1,991 needed to secure the party nomination in July.

Iowa Democrats filed into nearly 1,700 caucus sites - schools, libraries, churches, mosques and meeting halls with Sanders and Biden in the lead in the state, followed by former South Bend, Indiana mayor Pete Buttigieg and Senator Elizabeth Warren, who is also on the left of the party.

But polling has fluctuated and Iowa's quirky caucus system - where voting is not by secret ballot but by public declaration for a candidate - makes the night hard to predict.

Luke Elzinga, a volunteer for Sanders, appeared early at Lincoln High School in Des Moines which was converted into a caucus location.

"I think he really inspires a lot of young people, a lot of disaffected voters who might not otherwise turn out," Elzinga, 28, told AFP news agency shortly before the caucusing began.

"And so I think he's the best candidate to beat Trump."

Three candidates - Sanders, Warren and Amy Klobuchar - have faced the unprecedented scenario of spending much of the past two weeks tethered to Washington for the impeachment trial of Trump instead of on the campaign trail in Iowa.

Even as candidates sought to make 11th-hour impressions on undecided voters, the senators were obligated to return to Washington for the trial's closing arguments on Monday.

Defeating Trump

In a vote scheduled for Wednesday, Trump is almost certain to be acquitted by the Republican-led upper house on charges of abuse of power and obstruction of Congress.

For Democrats, second-tier hopefuls Klobuchar and tech entrepreneur Andrew Yang look to outpace expectations and seize momentum heading into the next contest in New Hampshire on February 11.

Earlier on Monday Biden - who still holds the lead in national polls - brought pizza to a field office in a strip mall near Des Moines to thank volunteers.

"I'm feeling good about today," he said.

Like many candidates, Biden spent the weekend crisscrossing Iowa in a final push to convince undecided voters he is best placed to accomplish Democrats' number one goal: defeating Trump.

The president has not stood idly by. On Sunday he branded Biden "Sleepy Joe" and described Sanders as "a communist," previewing a likely line of attack were Sanders to win the nomination.

Unlike secret ballot voting, caucus-goers publicly declare their presidential choice by standing together with other supporters of a candidate.

Candidates who reach 15 percent support earn delegates for the nomination race while supporters of candidates who fall short can shift their allegiance to others.

Turnout is critical, and candidates and their representatives will seek to persuade voters on issues including healthcare, taxes and ending Washington corruption.

One key candidate who has opted not to contest in Iowa is billionaire businessman Michael Bloomberg, who entered the race in November but has surged into fourth place in RealClearPolitics' national polling average.

The former New York mayor, who has spent more than $300m on advertising, according to Advertising Analytics, is focused on running a national campaign with particular emphasis on states that vote on "Super Tuesday," on March 3.

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