The Central Bureau of Investigation (CBI) has booked fugitive jeweller Mehul Choksi in three fresh cases of bank loan fraud.
Accused of defrauding the Punjab National Bank (PNB) of over Rs 13,000 crore along with his nephew Nirav Modi, Choksi has now been accused of defrauding and diverting loan funds to the tune of over Rs 6,700 crore. The loans were granted by a consortium led by the PNB and ICICI Bank.
According to the three CBI FIRs, the cases have been registered against Choksi, his three companies viz Gitanjali Gems, Gili India and Nakshatra Brands, and its directors.
The FIRs have alleged that the companies inflated sales figures, fraudulently obtained foreign letters of credit (FLCs) and diverted loan funds to related entities.
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Choksi fled India in January 2018 and has since taken citizenship of Antigua and Barbuda where an extradition request from India is pending in a competent court.
The complaints have alleged that pursuant to fraud detected in the functioning of the Gitanjali Group run by Choksi, a forensic audit of all his companies which had availed of loans from the consortium was conducted.
The FIR against Gitanjali Gems has claimed that Choksi and the directors of the company entered into a criminal conspiracy and were involved in “fudging of accounts, siphoning of funds, and utilising the sanctioned credit limits not for genuine trade transactions”.
The FIR also states that in the accounts of Gitanjali Gems, “fraudulent activities were done by Mehul Choksi in connivance with the company’s directors to enrich themselves illegally and derive unlawful and unjust gains, and thereby, caused loss to member banks of consortium… and have cheated member banks to the tune of Rs 5,564.64 crore.”
Similar allegations have been levelled in the two other FIRs registered against Gili Diamonds and Nakshatra Brands involving loan fraud amounts of Rs 375.71 crore and Rs 807.72 crore, respectively.
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In the case of Gitanjali Gems, the audit found that one of its major customers M/s Trans Exim had total creditors at USD 39.87 million (Rs 272 crore) in March, 2016, but the company in its stock statement in the same month reported trade receivable of Rs 1431.6 crore. This, the audit found to be considerably higher than the total creditors reported by Trans Exim.
“Thus it appears Gitanjali Gems has reported trade receivables at significantly higher levels,” the FIR said.
It has also flagged a payment of Rs 5.22 crore from Gitanjali Gems to M/S Mozart Trading Pvt Ltd, which it said is a related entity of Gitanjali Gems. Similarly, packing credits to the tune of over Rs 34 crore were found to have been utilised for payment of import bills drawn under fraudulently enhanced foreign letters of credit.
In the case of Gili India, it was found that the inventory of diamonds reported by the company in its audited balance sheet for March 31, 2017 was Rs 922 crore. However, the actual amount stock of diamonds based on the sales and purchase figures given in the audited balance sheet on March 31, 2017 was only Rs 521 crore, indicating overreporting of the inventory by more than Rs 401 crore.
