PNB FRAUD: ED RAIDS SHELL FIRMS; I-T attaches ₹145 cr assets

NEW DELHI: The Enforcement Directorate (ED) on Wednesday continued raids for the seventh day as it visited 17 locations across the country, including four shell companies in Mumbai, even as the I-T department attached assets worth Rs 145 crore in the alleged Rs 11,400-crore Punjab National Bank (PNB) fraud.

While the ED seized assets worth Rs 10 crore on Wednesday, the tax department said it has attached a total of 141 bank accounts and fixed deposits worth Rs 145.74 crore of the Nirav Modi group. The department said it had attached these assets to realise outstanding tax demands.

With Wednesday’s seizure, the total value of gems and gold jewellery seized by the ED stands at Rs 5,736 crore. The agency has said it is carrying out an “independent valuation” of these seized assets.

ED sleuths on Wednesday stepped up their action against the suspected shell or bogus firms linked to the operations of billionaire diamond jewellery designer Nirav Modi, his uncle and Gitanjali Gems promoter Mehul Choksi and others.

Multiple teams of the agency raided four locations of such firms in the Opera House, Peddar Road, Goregaon (East) and Powai areas of the Maharashtra capital, they said.

The Income Tax Department, which is also probing these instances, had on Tuesday launched action against the shell firms that are reported to have been used by the accused to launder huge money and evade taxes allegedly.

At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies probing the Rs 11,400-crore alleged fraud at a PNB branch in Mumbai (Brady House).

The ED has also summoned Modi and Choksi to appear before it this week at its Mumbai zonal office. The agency has not heard from the duo so far.

The agency will also seek information from foreign countries about the business operations of the firms and accounts linked to Modi and Choksi.

It is also expected to attach about three dozen properties in this case under the provisions of the Prevention of Money Laundering Act (PMLA) in the coming days.

ED sources had said that the agency is talking to senior PNB officials and recording their versions to ascertain how Letters of Understanding (Lous) are issued and other bank operations done.

It has also obtained information from a whistleblower in this case who had said he had raised red flags against Choksi’s loan in 2013.

It has also sought PNB’S audit reports since 2011 from the RBI.

The ED and the Income Tax department have zeroed in on the dummy or shell companies in India and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create benami assets in the form of land, gold and precious stones, which is now being probed by the agencies.

The government must get a free hand to probe the over Rs 11,000 crore PNB fraud case, allegedly involving billionaire jeweller Nirav Modi, the Supreme Court said on Wednesday. The top court said it would step in only when agencies fail to carry out the investigation properly.

The Centre, represented by Attorney General K K Venugopal, vehemently opposed a PIL, seeking an independent probe and deportation of Nirav Modi, before a bench headed by Chief Justice Dipak Misra saying “the inquiry has started and the FIRS have been registered”.

“If the government does not do things that are required, then you (petitioner) can come. It is not that the government agencies are not acting,” the bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said, adding that the government must have “a free hand” to probe the scam.

Lawyer Vineet Dhanda, who has filed the PIL, said that either notice be issued, or a status report called from the Centre as “the whole country was watching that the government had not done anything” in the past in a similar case relating to Vijay Mallya.

“Speeches have no impact on the court. We will hear the legal issue and not the emotional aspect,” the bench said, adding “this is not the way you argue a petition. The purpose is to gain publicity.”

Nirav Modi’s lawyer on Wednesday refuted the reports that his client was absconding, saying that he was out of India for “business purposes”.

Speaking to media here, Vijay Aggarwal said, “This is your perception that he is absconder. He (Nirav Modi) is not absconding. He has a global business, and he went out of India for business purpose. Now his passport has been revoked. His family members, some of them are foreign nationals, also stay abroad most of the time.”

He further alleged that the PNB had termed commercial transactions as a fraud.