Dubai firm’s director held for helping city firm launder ₹87 crore

THE ACCUSED HELPED HIS COUSIN’S COMPANY SIPHON OFF THE MONEY OUT OF INDIA BY EVADING CUSTOMS

MUMBAI: Officials of the directorate of revenue Intelligence (DRI) arrested the director of a Dubaibased metal trading company for helping a city-based firm belonging to his cousin, launder money to the tune of ₹87 crore.

The accused, Shubham Sachdeva, director of Escorp Commodities LLC, who was nabbed at Hyderabad airport last Thursday, is connected to a 2011 case of customs duty evasion and money laundering, involving Carnac Bunder- based Namco Industries Private Ltd. He was arrested on the basis of a lookout circular (LOC) issued against him in May 2016. DRI sources said Namco had imported a second-hand industrial machine in February 2011, by declaring its assessable value at ₹102.92 crore. In doing so, it had enjoyed zero customs duty under the Export Promotion Capital Goods (EPCG) scheme. The invoice for the same was raised by Escorp. It had then appeared that Namco procured the machine from Escorp.

According to DRI officials, as per EPCG conditions, Namco had an export obligation of earning foreign exchange equivalent to six times of the duty forgone — approximately ₹148.86 crore, within six years. Fifty per cent of the same should have been earned in the first four years, which expired in February 2014.

However, when DRI began its investigation after a complaint against Namco alleging overvaluation of the imported machinery, it realised that Namco had no intention to earn the foreign exchange equivalent. Namco also attempted to get status of a ‘sick company’ to avoid liability of Export Obligation Discharge Certificate (EODC) and repayment of loans. The probe revealed that Namco’s parent company, Namco Corp Ltd, first entered into an agreement with one SSAB Sweden to procure the machine for €3.20million (nearly ₹20.14 crore) in October 2009. However,namco Corp backed off.

Later, Namco entered into an agreement with Escorp in November 2009 and April 2010 for supply of the same machinery for €16.32 million (nearly ₹102.92 crore). However, DRI found that the actual supplier was SSAB Sweden and only the invoicing was done by Escorp.

They overvalued the machinery by 500% of the actual value and revenue officials suffered ₹87 crore loss. It was also found Sachdeva is the cousin of Namit Soni, director of Namco. Sachdeva was charged with sections 132 and 135 (1) Customs Act.