The CBI filed a fresh case against absconding diamantaire Mehul Choksi, wanted along with his nephew Nirav Modi in a loan fraud case of Rs 13,500 crore, for allegedly inflating the value of diamonds and jewellery pledged to get Rs 25 crore loan from IFCI, officials said on Monday.
The CBI has booked Mehul Choksi, his company Gitanjali Gems and valuers Surajmal Lallu Bhai and Co, Narendra Jhaveri, Pradip C Shah and Shrenik Shah, they said.
The central agency has acted on a complaint from Industrial Finance Corporation of India (IFCI) Ltd alleging that Choksi had approached it in 2016 seeking Rs 25 crore working capital loan for which he had pledged shares and gold and diamond jewellery.
According to the valuations submitted by four different valuers, the jewellery pledged was in the range of Rs 34-45 crore on the basis of which IFCI sanctioned the loan demanded by Choksi.
As the company allegedly defaulted on payments, IFCI started to invoke the pledged shares and jewellery.
However, the company could only sell 6,48,822 shares amounting to Rs 4,07 crore of the total 20,60,054 pledged shares because client ID of Mehul Choksi was blocked by NSDL, according to the complaint which is now part of the FIR.
IFCI now focussed on pledged jewels—gold, diamonds and studded jewellery—but its fresh valuations by a different set of valuers showed that their values were 98 per cent below the initial reports submitted by Choksi at the time of availing loan.
The fresh valuations showed that the pledged jewellery valued anything between Rs 70 lakh and a little over Rs 2 crore only, it said.
IFCI alleged that Choksi "with dishonest and fraudulent intention colluded with the valuers and got the valuation of the pledged jewels done with exorbitant and inflated value".
The fresh valuations showed that diamonds were of low quality lab prepared chemical vapour diamonds and other inferior colour stones and not real gemstones.
The loan account was declared a non-performing asset on June 30, 2018, causing wrongful loss of over Rs 22 crore to IFCI, it said.
"The CBI conducted searches at eight locations in Kolkata and Mumbai at the premises of the accused valuers. Incriminating documents were recovered," CBI spokesperson R.C. Joshi said.
Choksi is already accused of siphoning off over Rs 6,344.96 crore from Punjab National Bank (PNB) using fraudulent letters of undertaking and foreign letters of credit.
Officials at PNB's Brady House branch in Mumbai issued 165 letters of undertaking (LoUs) and 58 foreign letters of credit (FLCs) during March-April 2017, against which 311 bills were discounted.
These LoUs and FLCs were allegedly issued to Choksi's firms without any sanctioned limit or cash margin and without making entries in the bank's central banking system to evade any scrutiny in case of a default.
LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. If the client does not repay to the foreign bank, the liability falls on the guarantor bank.
Based on these LoUs by PNB, money was lent by SBI, Mauritius; Allahabad Bank, Hong Kong; Axis Bank, Hong Kong; Bank of India, Antwerp; Canara Bank, Mamana; and State Bank of India, Frankfurt.
"Since the accused companies did not repay the amount availed against the said fraudulent LoUs and FLCs, PNB made the payment of Rs 6,344.97 crore (USD 965.18 million), including the overdue interest, to the overseas banks, which had advanced buyer's credit and discounted the bills against the fraudulent LoUs and FLCs issued by the PNB," the CBI's supplementary charge sheet had alleged.
