ED files chargesheet against Mehul Choksi and 13 others in PNB fraud

The Enforcement Directorate (ED) on Thursday filed chargesheet against absconding jewellery trader Mehul Choksi and 13 others in the Rs 14,000 crore PNB scam. Choksi, the owner of Gitanjali Group, was charged under PMLA for money laundering.

Choksi is accused of defrauding PNB by illegally obtaining Letter of Undertaking (LoUs)/Foreign Letters of Credit (FLCs). According to the ED, three companies of Mehul Choksi namely - Gitanjali Gems Ltd, Gili India Ltd and Nakahatra Brands Ltd have got fraudulently issued LoUs to the tune of Rs 3011.39 crore and fraudulently got the credit limit of these FLCs enhanced to the tune of Rs 3086.24 crore. Total proceeds of the crime in the case now stands at Rs 6097.63 crore.

The prosecution complaint further said that the proceeds of crime was also remitted back to Gitanjali Group companies in the country in guise of export-import transactions. "The overseas companies mainly based in Hong Kong and UAE and several Indian entities were used for rotation of goods and funds in order to project inflated turnover in the Gitanjali Group," it said

According to the ED's charge sheet, goods that were exported from India were of abysmally low quality but their value was highly inflated. The diamonds and precious stones in the jewellery were removed and the gold was melted at local units and converted into bullion. Then everything was exported back to India as raw material.

Meanwhile, Choksi, whose whereabouts are currently unknown, moved the special CBI court in Mumbai on Wednesday to cancel two non-bailable warrants issued against him in April and May. The plea, which was filed through advocates Sanjay Abbot and Rahul Agarwal, contended that there is a threat to Choksi's life because of the recent trend of mob lynching; and consequentially impedes his return to India. The petition also elaborated ten reasons for his non-appearance before the CBI in the alleged Rs 14,000 crore Punjab National Bank (PNB) fraud case.     

The plea said, "It is most respectfully submitted that there have been various reported cases of mob lynching and one of the cases was in relation to an accused who was mob lynched while being inside a jail. This recent trend of mob lynching is growing and is attempting to giving justice on the road by the general public, and subsequently there is no prosecution because of non-identification of a particular individual is giving rise to the said tendency."

Choksi said he is apprehensive about disclosing his current location as there is a threat to his life from various persons. He cited existing employees, whose dues are yet to be paid, families of employees, landlords, creditors, and customers. He sought to take further  advantage by invoking poor medical condition, revocation of passport, and inequity of investigating agencies.