A “close” associate and vice-president of a firm of fugitive diamantaire Nirav Modi has been arrested by the Enforcement Directorate (ED) in connection with a money laundering probe in the over ₹12,000 crore Punjab National Bank scam , officials said on Wednesday.
Shyam Sunder Wadhwa, vice-president of Firestar group, was arrested on Tuesday night under the Prevention of Money Laundering Act (PMLA), the officials said.
The arrest was made in connection with the alleged fraudulent issuance of 150 Letters of Undertaking (LoUs) worth ₹ 6,498 crore through a Punjab National Bank branch and subsequently laundering of the funds so raised.
Preliminary investigations into the PNB scam involving Nirav and his companies have revealed that his partnership firms Diamond R US, Solar Exports and Stellar Diamonds had got issued the LoUs between February and May 2017 by suppressing SWIFT transactions from the Bank’s official records.
Of the total amount, about ₹.5064 crore was used allegedly for extinguishing the existing credit liabilities of the buyers, availed earlier from Indian bank branches abroad. The balance amount of ₹1,448 crore was used for making payment to 17 overseas firms, including Hong Kong-based Aura Gem Company Ltd and Sino Traders Ltd.
The ED alleges that Mr. Wadhwa, who is also a Chartered Accountant, had made one Kartik Doshi a shareholder in Sino Traders and got him to sign all the relevant documents of the Hong Kong-based company.
“Similarly, Divyesh Gandhi was made directors and Sonu Shailesh Mehta the owner in Aura Gem Company. These two companies were used for laundering proceeds of crime. In total, about ₹5,921 crore was paid to these two companies from the fraudulently issued LoUs in faviour of Nirav’s partnership firms,” said an official.
Of the funds so received, Aura Gem transferred an amount of ₹468 Crore and Sino Traders ₹506.69 crore to the partnership firms, thus allegedly completing the money laundering process.
Accordingly, the agency has accused Wadhwa of assisting Nirav Modi in the offence of money laundering. “However, he was not coming out with the facts related to the deals to which he was privy and was also trying to mislead the investigators. Therefore, he has been arrested,” said the official.
PTI adds:
Two money laundering FIRs
The ED has filed two money laundering FIRs against Nirav Modi and his uncle and Gitanjali Gems promoter, Mehul Choksi, to probe the Punjab National Bank scam. It has conducted a total of 251 country-wide searches in the case after it began the criminal probe against the accused in February.
The total seizure and attachment of diamond, gold, precious and semi-precious stones and other movable and immovable assets in the case stand at ₹7,664 crore.
