Even as Mehul Choksi, a key accused in the Rs 13,000 crore Punjab National Bank scam, plays up the victim card, the case against him continues to build up at home. The investigation by the Enforcement Directorate (ED) has found that the absconding jeweller diverted funds to the tune of over Rs 3,250 crore to foreign shores for his personal use.
However, in a second video recently released from his hideout in Antigua, Choksi has blamed agencies of raiding his companies - and virtually seizing the entire inventory in the factories and showrooms - on "misinformation" by PNB.
In its chargesheet filed against the absconding businessman, the ED said that Choksi diverted $56.12 million (about Rs 400 crore) of loan funds to his nephew Nirav Modi, accused of being the mastermind in the scam, and around $50 million 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," read the chargesheet. "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 agency said it has detected that funds totalling 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. In its probe report, accessed by PTI, the ED claimed that these funds 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 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 ED alleged, adding, "The dummy directors and others were mechanically transferring the goods and monies as per the directions of Choksi without any economic rationale and logic".
That's not all. Choksi was allegedly in the business of "highly inflating" prices of the gems and jewellery sold from his outlets. "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 chargesheet said. The ED added that these charges have been "confirmed" in the statement given to it under the Prevention of Money Laundering Act by Vipul Chitalia, vice-president (banking operations) of Choksi's Gitanjali Group.
"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 per cent of the declared value," the ED claimed.
According to the agency, the proceeds of the money laundering exercise in this case were "partly remitted back to Gitanjali group of companies" in India in the guise of export-import transactions for settling older credit liabilities. For instance, it was allegedly used to make payment for a villa booked by Choksi in the UAE as well as for transferring preferential shares of MS Bezel Jewellery (India) Pvt Ltd to Ms Al Burj Diamond and Jewellery FZE, UAE.
The ED chargesheet also accused 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. Moreover, Choksi's firms were guilty of "fraudulent export and import" and there was "no manufacturing activity" in any of the overseas companies situated in Hong Kong and the UAE - only bogus business and sales were carried out among the group companies. "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.
Choksi dismissed all these charges levelled against him by the ED as "false and baseless" in the first video that he released earlier this week. He had added that his properties were attached by the central probe agency "illegally".
The ED, meanwhile, has sought an Interpol arrest warrant against him, and has also approached a Mumbai court to get him declared a fugitive economic offender under the country's new Fugitive Economic Offenders Ordinance. In addition, India has recently moved for Choksi's extradition from Antigua.
With PTI inputs