MUMBAI: Diamond merchant Nirav Modi shifted all dummy directors of his six Hong Kong-based shell companies to Cairo after CBI registered a case in the Rs 6,500 crore Letter of Undertaking scam involving Punjab National Bank.
Divyesh Gandhi, director in Anuragen, one of the Hong Kong-based dummy companies, stated that he was handling accounts of all the six companies. He said that after the crisis, Nehal Modi, Nirav Modi’s US-based stepbrother, destroyed mobile phones of all dummy directors and shifted them to Cairo. Gandhi is not an accused in the case and was made a witness.
Gandhi also stated that Nirav would give instructions about questionable transactions to employees of the shell companies via self destructing email service, which would get deleted automatically after a stipulated period so that it doesn’t leave any trail.
He said there were financial transactions between these companies and another dummy company controlled by Nirav’s uncle Mehul Choksi. Gandhi stated that although the addresses of these six Hong Kong companies were different, the documents related to banking, sale-purchase and export-import used to be prepared in one place only.
The statement is part of the ED’s complaint (chargesheet) which they submitted to the special court in the Rs 6,500 crore money laundering case. The chargesheet mentioned that Nirav received money through fraudulent LOUs from PNB, in accounts of shell companies based in Dubai and Hong Kong.
He transferred part of the money into accounts of his family members and used the remaining money to clear pending LOUs. “Each time he would request a higher amount of LOU, so that he could pay off previous ones and use the remaining money for his business activity. He convinced bank officials by showing bogus papers of import-export business,” an official said.
The money was laundered through companies based in India — Solar Exports, Stellar Diamond, Diamond R US and Firestar Diamond International — and dummy companies based in Dubai and Hong Kong. Some dummy directors were paid Rs 8000 per month for allowing their names to be used.
Once the bank released the payment to shell companies abroad, part of the money was brought back to India (as export remittance) and was used to clear previous pending LOU and part of the money Nirav diverted into accounts of his family members. Gandhi admitted that after release of credit, he and his associates would manage its further flow on Nirav’s instruction.
Meanwhile, a special PMLA court on Tuesday took cognisance of the ED chargesheet and issued non-bailable warrants against Modi, his brother, father, sister and brother-in-law, among others.