PNB scam: Fearing investigation by Indian agencies, Mehul Choksi got dummy directors shifted to Bangkok, says CBI – The Economic Times

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The probe has revealed that Choksi appointed employees of his Gitanjali Group of Companies as Directors/ Partners/ Authorized Signatories to his Hong Kong based firms “M/s.Gitanjali Gems Ltd.

Planning his escape well in advance wanted jeweller, Mehul Choksi had a meeting with the dummy directors of his Hong Kong-based-supplier companies appraising them that “they might have to face enquiries by the Enforcement Directorate (ED)”. Followed by fleeing the country on January 4, 2018 and by February of that year getting these directors shifted to Bangkok to evade investigations. This revelation has been made by the Central Bureau of Investigation (CBI) in its supplementary chargesheet filed against 12 including Choksi, Vipul Chitalia, the then Vice President – Banking Operations, Gitanjali Group and former senior officials ofPunjab National BankNSE -1.53 % (PNB).

While the federal agency has named former PNB senior bank officials including Usha Ananthasubramanian, the former Managing Director & Chief Executive Officer, Allahabad Bank, two former Executive Directors, PNB, K. V. Brahmaji Rao and Saniiv Sharan as co-accused charging them with criminal conspiracy, cheating and destruction of evidence, no fresh evidence has been submitted against them in this chargesheet.

Detailing the role of Chatalia, the CBI in its supplementary chargesheet accessed by ET states that Chatalia helped in shifting the dummy directors to Bangkok once the scam came to light. The agency had also recovered

Original applications alongwith other accompanying documents submitted by Chokai’s accused firms namely : M/s.Gitanjali Gems Ltd, M/s.Gili lndia Ltd and M/s. Nakshatra Brands Ltd of the 165 fraudulent letter of understandings (LOUs) and fraudulently amended 58 foreign letter of credits (FLCs) from the premises taken on rent by the employee of Choksi at the instance of Chitalia, the new chargesheet states.

On the modus operandi the agency states that Chitalia dishonestly submitted the applications for issuance of 165 fraudulent LOUs and 58 FLCs on behalf of the three Mumbai-based accused firms to Gokulnath Shetty, deputy manager, PNB, Brady House branch in Mumbai. “The purpose of this trade transaction was purported purchase of fresh water pearls from M/s. Shanyao Gong Si Ltd., Hong Kong and M/s.4C’s Diamond Distributors, Hong Kong. lnstead it was utilized for discharging the liabilities of 85 LOUs which were unauthorisedly issued in a similar manner in 2016 and 136 bills drawn under fraudulent enhancements made in 41 FLCs issued in 2016 and 2017,” the chargesheet states. “385 bills of suppliers/ beneficiaries were discounted under unauthorized/fraudulent amendments made in said 58 FLCs.The beneficiaries who discounted bills in overseas banks were controlled by Choksi,” the chargesheet further adds.

The three Indian accused firms of Choksi were allegedly engaged in the circular trade with his Hong Kong based three entities and semi finished pearls studded jewellery was being exported to Hong Kong by the three Indian accused companies and after dismantling the jewellery in Hong Kong, the same pearls were being exported from Hong Kong based suppliers viz. M/s. Crown Aim Ltd., M/s. Shanyao Gong Si Ltd. and M/s. 4C’s Diamond Distributors to accused companies of Choksi, the chargesheet reveals.

The probe has revealed that Choksi appointed employees of his Gitanjali Group of Companies as Directors/ Partners/ Authorized Signatories to his Hong Kong based firms “M/s.Gitanjali Gems Ltd. “The accused firm is the holding company of M/s. Aston Luxury Ltd., Hong Kong which in turn is the holding company of one of the suppliers/ beneficiaries i.e. M/s. Crown Aim Ltd., Hong Kong,” the CBI’s probe states.

On evading investigation, the CBI chargesheet states,”During December,2017, Choksi visited Hong Kong and met the dummy directors of Hong Kong based supplier entities and told them that problems are going on in lndia related to Gitanjali Group and that they might have to face ED enquiries. This shows that Choksi had prior knowledge about the impending criminal proceedings. Hence, he fled the country on 04.01 .2018 with dishonest intent, to evade the process of law”.

At the Hong Kong meet, Choksi allegedly told the directors to apply for a Thailand visa as the operation in Hong Kong would be closed. Chitalia was allegedly tasked with the job for processing their work permit for working with M/s. Abbeycrest (Thailand) Ltd., Bangkok, which was also controlled by Choksi. ln January 2018,Chitalia conveyed to these executives that Choksi had instructed that they should not visit lndia as they might trouble from the investigating agencies from the India,” it adds.

“Choksi got them shifted to Bangkok in February 2018, when fraud came to light. He persuaded them not to return to lndia to face investigating agencies in lndia. Subsequently, they all returned to lndia in second quarter of 2018,” it further adds. These directors are now CBI’s witnesses in the case.

When reached for a comment, Vijay Aggarwal. Choksi’s India counsel told ET, “This supplementary chargesheet after three years shows that it is only an attempt to cover up Anomalies that defence has pointed out in first charge sheet. Moreover, addition of section 201IPC of destruction of evidence is not legally tenable as a document becomes evidence only after filing of the court, and the allegations are of a period much prior to even FIR”.

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