The Directorate of Revenue Intelligence (DRI), on the trail of Prashant J. Mehta, managing director of the listed gold exporting and retailing company, Rajesh Exports, which is in the dock for alleged ‘circular trading’, has contended that a sizeable chunk of gold imported by the company to its facility in the Cochin Special Economic Zone (CSEZ) has been illegally diverted into the domestic gold market.
DRI sleuths were surprised to find that the company, which is supposed to add value and export the gold that it brings into the country, did not even have basic equipment on its premises.
C.P. Udayabhanu, special public prosecutor arguing the case on behalf of the DRI, told a court here that “a major chunk” of gold thus imported seemed to have been smuggled into the domestic market, causing loss of several crores of rupees by way of tax to the exchequer.
Speaking to The Hindu later, Mr. Udayabhanu said the company, one of the largest dealing in gold and jewellery in the world, had imported over 6 tonnes of gold every year. “A consignment weighing 800 kg is still lying with Customs authorities at the Cochin International Airport Limited.
“At the rate of over 1.2 tonne every month, the company made huge gold imports especially since 2010. The exact quantity of gold it traded in at the SEZ has still to be quantified, as SEZ rules do not permit monitoring by any enforcing authority. So no agency could validate the quantity or veracity of the material exported by the firm in the SEZ.
“However, what really appalled the DRI when it raided the company premises was that it only housed a crude, rickety machine worth maybe Rs. 2 lakh for minting gold coins, for export, from the gold ingots it imported. The company claimed 25 employees on its rolls at the SEZ, but only a few were around,” he said.
Meanwhile, the CSEZ authorities here are mulling termination of the company’s licence for operating from their premises. They have slapped Rajesh Exports with a show cause notice.
“We have given them time till May 20 to explain themselves, and the proposal for revoking their licence will be considered by the Board of Approval (BoA) on that day,” A.N. Safeena, CSEZ Development Commissioner told The Hindu.
Meanwhile, a court in Ernakualm on Tuesday heard the bail plea of two employees of the company, its exim manager Harish Babu and manager Biju Abraham, in judicial custody after the DRI nabbed them on charges of smuggling pure gold weighing 900 gm, valued at Rs. 24.63 lakh, in violation of the Customs Act.
The agency told the court that a tip-off had led it to recover the unaccounted gold from Babu, who was waiting at the Ernakulam Town Railway Station to board the Island Express train to Bangalore. On interrogation, he stated that it had been given to him by Abraham.
Abraham is said to have stated before the agency that he was only following the instructions of the managing director Mehta, the prime accused in the case. While DRI officials in Bangalore are on his trail, an anticipatory bail application was moved on his behalf at the Sessions Court here on Tuesday.
Top company officials were inaccessible for comment.