ED files chargesheet against Mehul Choksi and 13 others in PNB scam

The Enforcement Directorate (ED) filed a prosecution complaint against Mehul Choksi and thirteen other people in connection with the Punjab National Bank (PNB) scam on Thursday. The chargesheet was filed before the special Prevention of Money Laundering Act (PMLA) court against Choksi and thirteen others.

Five companies owned by Choksi have been charged for money laundering (Section 3) of the PMLA, 2002. Earlier, the ED had initiated a money-laundering case against Choksi on June 16 under PMLA provisions on the basis of the First Information Report (FIR) registered by the Central Bureau of Investigation for criminal conspiracy (Section 120 (B)) and cheating (Section 420) of the Indian Penal Code along with Section 13(2) and criminal misconduct (Section 13(1)(d)) of Prevention of Corruption Act, 1988. Choksi had committed the offence of cheating Punjab National Bank in connivance with certain bank officials by fraudulently getting Letters of Undertaking (LoUs), Foreign Letters of Credit (FLCs) issued without following prescribed procedure and caused a wrongful loss to the bank.

M/s Gitanjali Gems Limited, M/s Gili India and M/s Nakshatra Brands Ltd had fraudulently issued LoUs to the tune of Rs 3,011.39 crore and fraudulently got credit limits of FLCs enhanced to the tune of Rs 3,086.24 crore. The total proceeds of crime in the case is Rs 6,097.63 crore.

During investigation, it was revealed that funds of LoUs obtained fraudulently were siphoned off through overseas suppliers M/s 4Cs Diamonds Distributors at Hongkong, M/s Shanyang Gong Limited at Hong Kong, M/s Asian Diamonds and Jewellery FZE at UAE, M/s Gitanjali Ventures DMCC, UAE and M/s Abbeycrest at Thailand.

On receipt of FLC applications, the Punjab National Bank paid enhanced funds to overseas companies M/s.4Cs Diamond Distributors and M/s. Crown Aim Limited (both located at Hong Kong), which are controlled by Choksi. Several other dummy companies like M/s Taipingyang Trading Limited at Hong Kong, M/s Trans Exim Limited, Hong Kong, M/s Al Burj Diamond, M/s Eternity Eternity Jewels Free Zone Establishment (FZE) and M/s Al Arba Jewels FZE, which were controlled by Choksi in Dubai and Hong Kong, were used for rotation of such funds. The proceeds of the crime was also remitted to Gitanjali Group in the guise of export-import transactions. The overseas companies, mainly based in Hong Kong and UAE, were used for rotation of goods and funds in order to project inflated turnover in the Gitanjali Group of Companies.

Five companies owned by Choksi have been charged for money laundering