Choksi diverted over Rs 3,250-cr to foreign shores, sold jewellery at inflated prices: ED

Agencies
September 12, 2018

New Delhi, Sept 12: An ED investigation has found that absconding jeweller Mehul Choksi diverted over Rs 3,250 crore funds, allegedly defrauded from a PNB branch in Mumbai, to foreign shores and he was in business of "highly inflating" prices of precious metals sold from his outlets. The businessman has rejected the charges as "baseless".

The agency, which is probing the $2 billion (about Rs 13,000 crore) alleged bank fraud that also involved his nephew Nirav Modi, said Choksi was "using several dummy companies" to rotate funds and to divert money for his personal use.

In its chargesheet, the Enforcement Directorate has said Choksi allegedly diverted $56.12 million (about Rs 400 crore) of loan funds to Nirav Modi and about $50 million (Rs 360 crore approx) to Modi's father Deepak Modi.

"Choksi was using several dummy companies for rotating his transactions. Under this arrangement, origin of the sale transactions and final destination used to be any of the Gitanjali group of companies.

"For in-between transactions, dummy companies were used for layering purpose wherein only sale/purchase bills were created and no movement of goods used to take place. He has been doing this to project inflated turnover to avail higher banking facility," the Enforcement Directorate (ED) has said in its charge sheet filed against the absconding businessman who is stated to be in the caribbean nation of Antigua now.

Choksi, talking to some media organisations, has termed ED's allegations as "false and baseless". He has also alleged that this properties have been attached by the central probe agency "illegally."

The agency said it has detected that funds to the tune of Rs 3,257.54 crore, that were obtained from PNB's Brady House branch in Mumbai, were "diverted" to countries like Thailand, the US, Belgium, UAE, Italy, Japan and Hong Kong and were deposited in "group entity" firms.

These funds, it said in its probe report accessed by PTI, were "fraudulently obtained" by Choksi and his firms from the PNB by way of Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs).

It also accused Choksi of grossly over-valuing the gems and jewellery that he sold.

"Choksi used to fix the rate/value of the goods without applying economic rationale. The goods in question were either low value or poor quality and was not commensurate with the price/value fixed by him," the ED said.

The charge sheet further said these charges have been "confirmed" in the statement given to it under the Prevention of Money Laundering Act (PMLA), by Vice President (banking operations) of Choksi's Gitanjali Group, Vipul Chitalia.

"It is further confirmed from the goods seized at Hyderabad whose declared value was found to be highly inflated and in some cases the actual value of these goods is even less than 3 percent of the declared value," the ED said.

The agency alleged the proceeds of crime of money laundering in this case involving Choksi were "partly remitted back to Gitanjali group of companies" in India in guise of export-import transactions for settling earlier credit liabilities.

"The proceeds of crime has also been used for making payment against the villa booked by Choksi in UAE and for transferring preferential shares of MS Bezel Jewellery (India) Pvt Ltd to Ms Al Burj Diamond and Jewellery FZE, UAE...," the charge sheet said.

It also charged Choski of conducting illegal 'air to air' export using the Gitanjali group, where consignments exported from India to Hong Kong and back were routed to Dubai but were not cleared through customs at the UAE airport and were exported to Hong Kong or India.

The ED report also said that "fraudulent export and import" was being done by Choksi's firms and there was "no manufacturing activity" in any of the overseas companies situated at Hong Kong and the UAE and only bogus business and sale amongst group companies were carried out.

"The export/import was also not genuine and was just rotational transactions. The jewellery exported from India was dismantled and diamonds/pearls were taken out of it," the agency charged.

The ED said, "It is apparent that the funds acquired by fraudulent means were siphoned off within the country as well as to the overseas dummy companies owned and controlled by Mehul Choksi himself."

"The dummy directors and others were mechanically transferring the goods and monies as per the directions of Choksi without any economic rationale and logic," the agency alleged.

The businessman has been also charged by the CBI for alleged corruption in this case and the ED has sought an Interpol arrest warrant against him apart from approaching a Mumbai court to get him declared a fugitive economic offender under a new law by the same name.

India has also recently moved for his extradition from Antigua.

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News Network
March 27,2024

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Hassan: Former Prime Minister and JD(S) supremo H.D. Deve Gowda has announced that his son, former Karnataka Chief Minister H.D. Kumaraswamy will contest from state's Mandya parliamentary seat as NDA candidate.

Deve Gowda told reporters on Tuesday that the decision to field Kumaraswamy, who is also JD(S) state president, in Lok Sabha polls from the Mandya seat was taken amid mounting public demand. "People are demanding that Kumaraswamy should contest from Mandya. In the core committee meeting as well, all members suggested that he should contest from Mandya," Deve Gowda said.

The former Chief Minister's son Nikhil Kumaraswamy had lost to independent candidate Sumalatha Ambareesh from Mandya in the 2019 Lok Sabha polls.

The JD(S) supremo further said that the name of senior leader Mallesh Babu has been finalised from the Kolar seat.

Deve Gowda's grandson and former Karnataka Minister H. D. Revanna's son sitting JD(S) MP Prajwal Revanna will be contesting as the NDA candidate from the Hassan seat.

Earlier in the day, Kumaraswamy in a media briefing indicated that he would contest from Mandya amid mounting public pressure on him.

Congress has fielded Venkatarame Gowda popularly known as ‘Star Chandru’ from the Mandya seat dominated by Vokkaligas. Star Chandru is a close associate of Deputy Chief Minister D.K. Shivakumar.

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News Network
March 18,2024

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Russian President Vladimir Putin claimed a landslide victory in the just-concluded presidential polls, securing him a fifth term in power. While Putin hailed the results as an indication of "trust" and "hope" in him, critics panned the polls for its preordained nature.

As early results poured in, Putin won 87.8% of the vote, the highest-ever result in Russia's post-Soviet history, Reuters quoted Public Opinion Foundation (FOM) exit polls. The Russian Public Opinion Research Centre (VCIOM) put Putin on 87%. 

If he completes the term, the 71-year-old President will also script history as Russia's longest-serving leader for more than 200 years, overtaking Josef Stalin. 

While Communist candidate Nikolai Kharitonov finished second with just under 4%, newcomer Vladislav Davankov third, and ultra-nationalist Leonid Slutsky fourth, partial results suggested.

In his victory speech, Putin said he would prioritise resolving tasks associated with Russia's "special military operation" in Ukraine and would strengthen the Russian military. 

"We have many tasks ahead. But when we are consolidated - no matter who wants to intimidate us, suppress us - nobody has ever succeeded in history, they have not succeeded now, and they will not succeed ever in the future," said Putin. He was welcomed by his supporters to the stage with "Putin Putin" chants. He also hailed the results as an indication of "trust" and "hope" in him.

Later, while interacting with reporters, Putin also warned the West that a direct conflict between Russia and the U.S.-led NATO military alliance would mean the planet was one step away from World War Three but said hardly anyone wanted such a scenario. "It is clear to everyone, that this will be one step away from a full-scale World War Three. I think hardly anyone is interested in this," Putin told reporters after winning the biggest-ever landslide in post-Soviet Russian history.

Meanwhile, the Western world condemned the elections, stating the polls were neither free nor fair. While Germany called it a "pseudo-election" under an authoritarian ruler reliant on censorship, repression and violence, UK Foreign Secretary Lord Cameron condemned "the illegal holding of elections on Ukrainian territory".

Ukraine's President Volodymyr Zelensky said, "The Russian dictator is simulating another election".

Earlier during the elections, heeding an opposition call to protest, hundreds of  Russians crowded outside polling stations at noon Sunday, on the last day of the elections. The associates of Alexei Navalny, the critic of Putin who died earlier this month in an Arctic prison, had urged people who were unhappy with Putin or the war in Ukraine to go to the polls at noon on Sunday. Many turned up and lines outside a number of polling stations both inside Russia and at its embassies around the world appeared to swell at that time.

Among those heeding the call was Yulia Navalnaya, Navalny's widow, who joined a long line in Berlin. She later told reporters that she cast her vote and wrote her late husband's name on the ballot.  Asked whether she had a message for Putin, Navalnaya replied: "Please stop asking for messages from me or from somebody for Mr. Putin. There could be no negotiations and nothing with Mr. Putin, because he's a killer, he's a gangster."

One woman in Moscow, who said her name was Yulia, told the AP that she was voting for the first time. "Even if my vote doesn't change anything, my conscience will be clear ... for the future that I want to see for our country," she said. Like others, she didn't give her full name because of security concerns.

Another Moscow voter, who also identified himself only by his first name, Vadim, said he hoped for change, but added that "unfortunately, it's unlikely".

More acts of rebellion were reported on Saturday too. Cases were filed against at least 15 people for pouring dye in ballot boxes, started fires or lobbing Molotov cocktails at polling stations. Ella Pamfilova, the head of Russia’s CEC, said 29 polling stations across 20 regions in Russia were targeted, including eight arson attempts.

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News Network
March 16,2024

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New Delhi: The 2024 general election for 543 Lok Sabha seats will be held in seven phases from April 19, Chief Election Commissioner Rajeev Kumar said today, announcing the largest democratic exercise in the world. Results will be announced on June 4.

The seven phases: 
April 19
April 26
May 7
May 13
May 20
May 25
June 1

Simultaneous election for Lok Sabha and assembly will be held in four states -- Sikkim, Odisha, Arunachal Pradesh and Andhra.  

By-elections will also be held for 26 assembly seats across multiple states, including Bihar, Gujarat, Haryana, Jharkhand, Maharashtra, Rajasthan and Tamil Nadu.

Mr Kumar, announcing the dates, sent out a strong message on fake news on social media, saying political parties should ensure responsible social media behaviour -- "verify before you amplify".

"Fake news will be dealt with severely as per existent laws.. Section 79 (3)(B) of the IT Act empowers nodal officers in each state to remove unlawful content," he said.

The other strong message was on violation of model code in terms of hate speeches. "There should be issue-based campaign, no hate speeches, no speeches along caste or religious lines, no criticism of anyone's personal lives," he said.

The media must clarify when they carry political adverts, those cannot masquerade as news, he said. Individual messages regarding this would be sent to the candidates, he added.

The commission has employed 2,100 advisors to keep an eye on these issues and strong action will be taken regarding this, he said.

Voters above the age of 85 years and persons with disabilities, with 40 per cent disability can vote from home, Mr Kumar said. Around 82 lakh voter are above the age of 85, he said.

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