ED seeks fresh warrant against Choksi, 5 others
MUMBAI:THE enforcement directorate (ED) on Monday sought a fresh non-bailable warrant against Mehul Choksi and five others accused booked for money laundering in connection with the Punjab National Bank (PNB) fraud case.
The counsel for the ED pleaded the Prevention of Money Laundering Act (PMLA) court to take cognisance of the complaint filed against Choksi and 13 others by the agency last week.
The agency said that of the 14 accused, five comprise the companies that were used to launder money. The others named are Mehul Chinubhai Choksi, Gokulnath Shetty, Vipul Chitalia, Dharmesh Bothra, Rakesh Gajera, Sunil Varma, Deepak Kulkarni, Jayesh Indravadan Shah, and Nehal D Modi.
It pleaded that the warrant may be issued against those who are absconding, including Modi and Choksi. The court is likely to pass an order on the plea by Tuesday.
According to the charge sheet, three of Choksi’s companies – Gitanjali Gems, Gili India Ltd and Nakshatra – fraudulently issued letters of undertaking (Lous) worth ₹3011.39 crore and got the credit limit of foreign letters of credit (FLCS) enhanced to ₹3086.24 crore. LOUS serve as bank guarantees that allow clients to raise credit from foreign branches of Indian banks, and FLCS are guarantees to third parties or vendors that money will be paid for the good supply.
The charge sheet claims that funds obtained were siphoned to overseas suppliers, 4C’s Diamonds Distributors and Shanyang Gong SI Limited in Hong Kong; Asian Diamonds, Jewellery FZE and Gitanjali Ventures DMCC in UAE; and Abbeycrest (Thailand) Limited in Thailand.
Upon the receipt of the FLC application, the bank paid enhanced funds to overseas firms – 4 C’s diamond distributors and Crown Aim Limited, both located in Hong Kong. The charge sheet claims that both these firms are actually controlled by Choksi.