Mumbai: The Enforcement Directorate (ED) will file a charge sheet this week outlining how entities linked to jeweller Nirav Modi siphoned off and round-tripped Rs7,500 crore from Punjab National Bank (PNB), said two people aware of the development.
“The key charges are money laundering, fund-siphoning and round-tripping involving 50 overseas entities by Nirav Modi, his associates and staff of his group of companies," an ED official, the first of the two people quoted above, said on condition of anonymity. “We were targeting to file a charge sheet by the middle of this month. Might be slightly delayed by a day or two. The charge sheet is tracing Rs7,500 crore of bank funds that were utilized for purposes other than stated purposes."
The Central Bureau of Investigation (CBI), in its own charge sheet filed on Monday on the Rs12,636-crore scam, named 25 entities, including 22 individuals and three firms. Following this, the government initiated the process of removing top bankers, including Allahabad Bank managing director Usha Ananthasubramanian and two executive directors of PNB. CBI will file a second charge sheet later this week.
In addition to Nirav Modi, his brother Nishal Modi and Shyam Sunder Wadhwa, vice-president (finance) of Firestar Group, the ED charge sheet is also likely to name several current and former PNB officials. Three firms—Stellar Daimonds, Diamonds R US and Solar Exports—will also be named, said the official.
According to this official, the 50 overseas entities are located in Hong Kong, Dubai, the Netherlands and Belgium. The two Hong Kong firms—Auragem Co. Ltd and Sino Traders Ltd—were used to launder funds, this official added.
“From LoUs fraudulently issued by PNB for the three Nirav Modi Group of firms—Solar Exports, Stellar Diamonds and Diamonds R US—a sum of Rs5,921 crore in all was paid to the two Hong Kong-based companies. Out of these funds, Auragem transferred an amount of Rs468 crore and Sino Traders Rs506.69 crore to the three borrower companies, thereby completing the process of laundering money," the official said.
Mint had reported on 21 February that Auragem has its origin in British Virgin Islands, a tax haven also home to various entities named in the Panama Papers money laundering case. (bit.ly/2wKmkY6 )
According to the agency official cited above, Wadhwa who was arrested on 27 March was instrumental in transferring ownerships of these Hong Kong based firms. In 2012, Atlantic Sensor transferred its entire shareholding in Auragem to a Dubai-based individual named Sonu Shailesh Mehta. Mehta remained Auragem’s sole director till 2016. Wadhwa was also responsible in the appointment of Divyesh Kumar Gandhi, another Hong Kong-based individual, as a director.
“He also made a certain Kartik Doshi as a shareholder in Sino Traders," the official added.