Mumbai: A special Prevention of Money Laundering Act (PMLA) court has remanded Deepak Kulkarni, an aide of fugitive jeweller Mehul Choksi, to the custody of the Enforcement Directorate (ED) till November 12. The ED arrested Kulkarni when he landed at Kolkata airport from Hong Kong on November 6. He has been arrested in connection with the multi-crore Punjab National Bank (PNB) fraud case.
The ED officers produced Kulkarni before a local court which granted them his transit remand so that he could be produced before the concerned court for a regular remand. The ED then brought Kulkarni to Mumbai and produced him before a special PMLA court on Thursday.
The ED sought Kulkarni’s custody as part of its probe against Choksi and Nirav Modi for allegedly cheating PNB to the tune of thousands of crores of rupees with the help of some of the bank employees. The ED court remanded him to ED custody till November 12.
The agency wants to question Kulkarni on how various overseas shell companies created by Choksi and Modi were used to siphon off funds procured fraudulently via Letters of Undertakings (LoUs) from the Mumbai branch of the PNB.
According to the ED, three companies controlled by Choksi – M/s Gitanjali Gems Ltd, M/s Gili India Ltd and M/s Nakshatra Brand Ltd – had allegedly obtained LoUs worth Rs 3, 011 crore in contravention of prescribed procedures and also fraudulently got credit limits of Foreign Letters of Credit (FLC) enhanced to the tune of Rs 3,086 crore.
The issuance of the fraudulent LoUs is said to be the crux of the mega financial fraud.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant a short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay liability to the credit giving bank, along with accruing interest. Modi and his uncle Choksi are among the main accused in the scam pegged at about Rs 13,400 crore.
