Mumbai: The Enforcement Directorate (ED) has taken several transactions of firms of jeweller Mehul Choksi, who is an accused in the Punjab National Bank (PNB) fraud case, that are located in India and abroad under the scanner on suspicions that they are allegedly involved in circular trading and money-laundering, said agency sources.
According to sources, the probe found that often, import consignments received in the name of the UAE-based entities allegedly controlled by the accused’s group of companies, from the latter’s Indian entities, were allegedly not cleared through the Customs at UAE airport.
Instead, the same were further allegedly exported under the ‘air-to- air’ system to certain Hong Kong-based companies allegedly controlled by the group.
The ED has accused the firm of having several overseas subsidiary/dummy companies that were used for “circular trading”. The Indian entities were importing unfinished goods pertaining to diamonds, coloured stones and pearls from the accused’s overseas entities, mainly located in Hong Kong and the UAE, the probe revealed. The same goods were allegedly shown to be processed and made into jewellery and again exported by the Indian entities to his overseas entities, said a source.
After removing diamonds, coloured stones and pearls from the jewellery, the gold and silver were allegedly sent for melting and converted into bullion and sent back to India directly or through Dubai, the source said. “While rotating such transactions, sometimes there was a one-step transaction and sometimes two or three-step transactions,
depending upon the instructions received,” the source said.
The ED is verifying if the accused firms’ paid employees were deputed as dummy directors of most of the overseas firms.
The probe also showed that payments received from Hong Kong-based firms were allegedly remitted into the accounts of the accused group’s Indian firms that were later used allegedly for “repayment of bank loans” of UAE-based banks. The probe is verifying whether “in the name of export and import, money-laundering activities were being carried out,” the source said.
Choksi’s firms are accused of fraudulently acquiring letters of undertaking (LoU) and foreign letters of credit (FLCs) worth over Rs 6,100 crore that were, in many cases, not allegedly used for the stated purpose — payment of import bills, said ED sources.
