Mumbai: The Enforcement Directorate (ED) on Thursday said that Gitanjali Group chief Mehul Choksi siphoned off funds received as LOUs from banks to his overseas companies through alleged foreign suppliers.
"Funds of LOUs (Letter of Undertaking) obtained fraudulently were siphoned off through their alleged overseas suppliers namely -- 4C's Diamonds Distributors in Hong Kong, Shanyang Gong SI Limited in Hong Kong, Asian Diamonds and Jewellery FZE and Gitanjali Ventures DMCC in the United Arab Emirates (UAE) and Abbeycrest Limited in Thailand," the ED said.
The agency has named Choksi's three companies namely Gitanjali Gems Ltd, Gili India Ltd and Nakshatra Brand Ltd that have got fraudulently issued LOUs to the tune of Rs 3,011.39 crore and fraudulently received the credit limits of foreign letter of credit (FLC) enhanced to the tune of Rs 3,086.24 crore totalling to Rs 6,097.63 crore.
Beside Choksi, the ED has named 13 -- eight individuals, five companies -- under the Prevention of Money Laundering Act (PMLA), 2002.
The ED in its chargesheet said that on receipts of FLC application, the bank paid enhanced funds to overseas companies or firms namely 4 C's Diamond Distributors and Crown Aim Limited (both located in Hong Kong) which are "actually controlled" by Choksi.
"In addition, there are several other dummy companies controlled by Choksi in Dubai and Hong Kong which were used for layering and rotation of such funds," the investigating agency said.
"These companies are having Directors or partners, who were mere employees or dummies and ultimate decision making always remained with Choksi," it claimed.
The ED also said that most of these companies had "no genuine business" and were only "paper companies used for rotation of funds".
The agency claimed that the proceeds of crime was also remitted back to Gitanjali Group Companies in India in guise of Export-Import transactions.
"Such remittances received in India were again circulated among group companies and other Indian Companies for settling earlier liabilities of FLCs and LOUs at PNB," the agency said.
The ED's action comes in the wake of a money laundering case it filed against Choksi on the basis of a Central Bureau of Investigation (CBI) case.
The CBI filed three FIRs between January and March to probe the PNB fraud. Most of the accused are common to these cases. The fraud was committed during 2011-17 by illegally issuing LoUs and FLCs.
In its first chargesheet, the CBI alleged that diamond jeweller Nirav Modi, through his companies, siphoned off funds to the tune of Rs 6,498.20 crore using fraudulent LoUs issued from PNB's Brady House branch in Mumbai.
Meanwhile, Mehul Choksi, Modi's uncle, allegedly swindled Rs 7,080.86 crore.
Choksi and Modi are said to have left the country before criminal cases were lodged against them in February.