ED moves special court seeking 'immediate confiscation' of over Rs 3,500 cr assets of Nirav Modi and Mehul Choksi

The Enforcement Directorate (ED) has moved a special court on Wednesday seeking ‘immediate confiscation’ of attached assets valued at over Rs 3,500 crore of fugitive diamaintaire Nirav Modi and his uncle Mehul Choksi of Gitanjali Gems under the Fugitive Economic Offenders Ordinance. Earlier this month, the ED filed a chargesheet against Modi and obtained a ‘red corner notice’ or global arrest warrant issued by the Interpol against him.

Meanwhile, the Central Bureau of Investigation (CBI) team had come to Rajasthan in connection with Nirav Modi case. Two locals have been detained by them, according to ANI.

CBI team had come here in connection with Nirav Modi case. 2 locals have been detained by them. CBI team was given assistance by police as per protocol: Rajendra Singh Choudhary, SP, Ajmer #Rajasthan pic.twitter.com/MctQPokITs

— ANI (@ANI) July 11, 2018

The ED, has so far, attached assets worth Rs 1,175 crore of Modi and Rs 2,400 crore of Choksi in India, a report in the Indian Express said. The assets includes movable and immovable assets, diamonds, gold, and jewellery.

The ED will file an application under the recently-promulgated Fugitive Economic Offenders Ordinance, which empowers it to confiscate “all linked assets” of an absconding loan defaulter, the sources said adding that a similar plea will be made against diamantaire Nirav Modi.

The agency had charged Choksi and his three firms - Ms Gitanjali Gems Ltd, Ms Gili India Ltd and Ms Nakshatra Brand Ltd - to have obtained “fraudulently issued letters of undertaking to the tune of Rs 3,011.39 crore and obtaining credit limits of foreign letters of credit enhanced to the tune of Rs 3,086.24 crore.”

The total proceeds of crime in this case is Rs 6,097.63 crore, the ED had claimed in its chargesheet.

The agency had said its investigation has revealed that the “goods exported from India (by Choksi’s firms) were of abysmally low quality but the value was highly inflated.”

“The valuation of the export/import goods was used to be decided by Choksi,” it said.

“Books of Gitanjali group were also manipulated by using third party remittance system and fabricated debtors were used to be created in order to enhance the drawing power for continuation or enhancement of credit limits,” the ED said.

During the investigation, the ED chargesheet said, it came to light “that funds were also diverted from Dubai to several overseas subsidiaries of Gitanjali group in guise of loan repayment, loan, advances among others.”

Choksi and his nephew Modi are being investigated by the ED and the CBI in an alleged fraud case relating to the Punjab National Bank after it was detected that they allegedly cheated the bank of more than Rs 13,400 crore with the purported involvement of a few of its employees.

The scam, which reportedly began in 2011, was detected in January this year, after which PNB officials reported it to the probe agencies.

Two criminal complaints were filed by the ED in these instances after taking cognisance of CBI FIRs.

Fugitive Economic Offenders Bill

The Fugitive Economic Offenders Bill, 2018 was introduced in the Lok Sabha on 12 March and the Union cabinet on 21 April approved the ordinance. President Ram Nath Kovind gave his assent to promulgate it a day later.

“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the government had said.

Cases of frauds, cheque dishonour or loan default of over Rs 100 crore would come under the ambit of this ordinance.

The government has said the ordinance offers necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal before the high court.

With inputs from PTI.