The Gem & Jewellery Export Promotion Council (GJEPC) has issued a statement condemning the alleged illegal activities involving two high profile diamond traders.
“The Nirav Modi/Gitanjali Gems incident is of concern to the entire Gems & Jewellery industry. The industry strongly condemns any sort of unlawful & illegal actions by any individual, trade or otherwise,” GJEPC said in a statement.
“When thousands of exporters undertake business lawfully, incidents of this kind can only take place due to non-adherence of procedures and norms laid down. The Council strongly believes that this incidence will not have any contagion effect to the industry,” it said.
It said bank finance to the trade was already guided by stringent norms of RBI and Government of India with detailed Internal audits in place on quarterly and annual basis. This in turn was followed by external audits and a special audit by RBI every few years.
“Every SWIFT transaction by the bank is intimated to NOSTRO and International Division (treasury) of the bank. In addition to this, RBI launched Export Data Processing and Monitoring System (EDPMS) in March 2014 to monitor payments against Export/Import Bill. It is a system where all export/import transactions are captured and followed up till their realization by banks and customs,” GJEPC said.
The Council operating under Ministry of Commerce, said going by the prevalent compliance system followed, chances of such vast irregularity without any detection across several financial periods were ‘extremely surprising and unreasonable’.
“This only demonstrates lacunae in internal control system and failure or lack of fraud protection measures within the PSU,” it added.
The council said, “On one hand GJEPC is struggling to garner financing to the Gem & Jewellery exporters, especially the SME export sector, who are required to give upward of high collateral for the limit sanctioned to them, and here one finds this kind of clear advances (LoU) being provided by a bank without any safeguards, that speaks volumes of irregularities that needs to be thoroughly investigated.”
GJEPC said it was ready to assist and support all investigating agencies in all possible ways, reach the right conclusion and punish the guilty.
“As an apex council for promotion of Gems and Jewellery exports, GJEPC condemns the incident and insists thorough investigation in the shortest possible time frame,” it added.
