India’s Big bank fraud investigation widens the scope to Gulf

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India’s second largest bank faced humiliation when it announced the fraudulent disbursements in the case of Nirav Modi and Mehul Choksi. This big bank robbery was perpetrated¬† in connivance with PNB’s Mumbai-based Brady House branch officials which managed to issue unauthorized LoUs aggregating to Rs 3,032.17 crore and FLCs aggregating to Rs 3,106.56 crore in the name of Gitanjali group and the funds so raised for payment of import bills were not utilised for such purposes.

India’s premier investigation body Central Bureau of Investigation launched the Criminal Complaint (popularly called FIR in India) against the Gitanjali Group and considering this as the base Enforcement Directorate (which investigates the money laundering crimes and trans border assets seizures for India) commenced its investigations.

Modus Operandi of Fraud

Mehul Choksi of Gitanjali Group had devised a modus operandi under which the Indian entities of his firms were importing unfinished goods and raw material like diamonds and pearls from his own overseas entities (in most of the cases, shell companies) situated mainly in Hong Kong and the United Arab Emirates (UAE). Same jewellery was later sent back to his other companies under the disguise of the exports.

Overseas Subsidiary Companies

The overseas companies which were mostly used for routing the transactions are

  1. Crown Aim Ltd
  2. 4C’s Diamonds Hong Kong
  3. Gitanjali Ventures DMCC
  4. Asian Diamonds Jewellery FZE

 

In the name of export and import, Choksi through his various companies in India and abroad was involved in money laundering activities.