Mumbai: Three private banks are in the dock after the Enforcement Directorate (ED) initiated a probe against a diamond merchant in the city. The ED had on December 26, raided six shell companies owned by the diamond merchant and found documents related to bank transactions of these companies. The seized documents revealed that around Rs 700 crore were illegally converted into foreign exchange through the import remittance route.
“We discovered that three private banks’ accounts were used to make transactions. Since all of the transactions were made after demonetisation, the banks should have kept a tab on massive amounts that were transferred and also informed the relevant authorities. We have called three managers for questioning and will investigate further,” said an ED source. The source added that after questioning the bank managers, ED official would question other bank employees who were directly dealt in the transaction.
He added that after examining the documents, ED officials found that the transactions were made through three private banks accounts. The Asian Age had on December 26 reported that the ED had raided a merchant’s office in South Mumbai after it received a tip-off that he was using demonetised currency notes. The ED recovered documents related to six different shell companies, which were linked to three private banks. During the search, the ED also found documents pertaining to fourteen more shell companies.
Speaking to The Asian Age, an ED source revealed, “The businessman who owned the exports company would create six to seven shell companies, which would be active for at least six months. These companies would create bank accounts to transfer the illicit money. The money was then converted to foreign exchange and deposited in offshore locations. Once this was done, they would dissolve the shell companies, create new ones and repeat the same procedure using different banks and bank accounts.”
The I-T department had on January 15 raided a diamond merchant in the city who was allegedly importing diamonds via the import remittance method. The merchant said to be staying in south mumbai allegedly conducts its business in the Bandra Kurla Complex diamond hub and is under the scanner for converting nearly Rs 300 crores into dollars.
Another scam that was busted
The ED had on December 16 raided four establishments located in South Mumbai’s Zaveri Bazaar acting on an input that the traders were converting black money by purchasing precious metals. Following demonetisation, the traders were allegedly using denotified Rs 500 and Rs 1,000 notes and getting them converted to gold bullions. The ED had also frozen two accounts with Rs 1.5 crore as deposit amount after the raids. The probe revealed that each of them had created at least eight shell companies for undertaking money-laundering transactions.
