The finance ministry has sent banks a list of Gitanjali Gems Ltd.’s 36 domestic and global subsidiaries — including in the U.S., Dubai, China and Japan — cautioning bankers from dealing with these entities.
Some of the units named in the list are MMTC Gitanjali Ltd., Diamlink Jewelery Inc. and Kiam Jewels DMCC among others. Most of the companies are in gems and jewellery sector.
The development is a direct fallout of the ₹11,500 crore scam in Punjab National Bank that involves diamond merchants Nirav Modi and Mehul Choksi and their firms. The scam came to light after PNB noticed unauthorised transactions from a branch in Mumbai to secure overseas credit. Mr. Choksi, managing director of BSE-listed Gitanjali Gems, is Mr. Modi’s uncle.
‘Thorough probe’
According to the Gem and Jewellery Export Promotion Council (GJEPC), total diamond exports were $23 billion with value addition exceeding $7 billion.
“On one hand GJEPC is struggling to garner financing to the gem and jewellery exporters, especially the SME export sector, who are required to give high collateral” for the limit sanctioned, GJEPC said. “Here one finds this kind of clear advances (LoU) being provided by a bank without any safeguards,” it said, urging a thorough probe in the case.
