Mehul Choksi pledged ‘laboratory diamonds’ with inflated valuation to secure Rs 25 crore loan from IFCI: CBI: The Tribune India
New Delhi, May 2
The CBI has filed a new complaint against fugitive diamond dealer Mehul Choksi, wanted along with his nephew Nirav Modi in a Rs 13,500 crore loan fraud case, for allegedly inflating the value of diamonds and jewelry pledged to secure a loan of Rs 25 crore from the IFCI, officials said on Monday.
The CBI has booked Mehul Choksi, his company Gitanjali Gems and assessors Surajmal Lallu Bhai and Co, Narendra Jhaveri, Pradip C Shah and Shrenik Shah, they said.
The central agency has acted on a complaint from the Industrial Finance Corporation of India (IFCI) Ltd alleging that Choksi approached it in 2016 for a working capital loan of Rs 25 crore for which he had pledged shares and gold and diamond jewelry.
According to valuations submitted by four different appraisers, the pledged jewelery was in the range of Rs 34-45 crore on the basis of which IFCI sanctioned the loan sought by Choksi.
With the company allegedly in default, the IFCI began citing the pledged shares and jewelry.
However, the company was only able to sell 6,48,822 shares amounting to Rs 4.07 crore out of the total of 20,60,054 pledged shares as the identity of Mehul Choksi’s client was blocked by NSDL, according to the complaint which is now part of the FIR.
The IFCI was now focusing on pawn jewelry – gold, diamonds and studded jewelry – but its new valuations by another group of appraisers showed their values were 98% lower than initial reports submitted by Choksi at the time of the report. granting of the loan.
The new valuations showed the pawn jewels to be worth between Rs 70 lakh and just over Rs 2 crore only, he said.
The IFCI alleged that Choksi “with dishonest and fraudulent intent colluded with the appraisers and obtained the appraisal of the pawned jewelry with an exorbitant and inflated value”.
The new appraisals showed the diamonds to be low quality lab prepared chemical vapor diamonds and other inferior colored stones and not real gemstones.
The loan account was declared a non-performing asset on June 30, 2018, causing an unwarranted loss of over Rs 22 crore to the IFCI, he said.
“The CBI conducted searches at eight locations in Kolkata and Mumbai at the premises of the accused assessors. Incriminating documents have been recovered,” CBI spokesman RC Joshi said.
Choksi is already accused of siphoning off more than Rs 6,344.96 crore from the 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 Commitment (LoU) and 58 Foreign Letters of Credit (FLC) between March and April 2017 against which 311 invoices were discounted.
These LoUs and FLCs would have been issued to Choksi businesses without any sanctioned cash limits or margins and without making entries into the bank’s central banking system to evade scrutiny in the event of default.
LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. If the customer does not reimburse the foreign bank, the responsibility lies with the guarantor bank.
Based on these Letters of Understanding 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.
“As the accused companies failed to repay the amount claimed against the said fraudulent LoU and FLC, PNB made the payment of Rs 6,344.97 crore (USD 965.18 million), including overdue interest, to the foreign banks, which had advanced the buyer’s credit and discounted the invoices against the fraudulent LOUs and FLCs issued by the PNB,” the CBI supplemental indictment alleged.