The Income Tax Department has detected more proof, which reveals how billionaire jewellers Nirav Modi (in pic) and Mehul Choksi used fake receipts to inflate turnover and then secure loans from banks. Sources said the value of could be about Rs 5,200 crore. Inflating revenue using forged receipts is the modus operandi in many a scam. Satyam scandal being the most notorious. The method, industry sources said, is now rampant in gems and jewellery trade.
“The companies owned by the two jewellers used fake receipts for sale and purchase. This helped them inflate their turnover and secure more credit from banks. It seems many companies in the trade are involved in such practice,” said an official.
Fake receipts were discovered during raids on the premises of Nirav and Choksi in which dozens of properties were also seized and bank accounts frozen.
Market insiders said many companies have been issuing fake receipts for a 1-2 per cent commission. They have multiple registered companies registered both in India and overseas for carrying out this operation.
The firms controlled by Nirav and Choksi are learnt to have used these bills to get higher credit limit.
In a related development, top honchos of public sector banks have come under the scanner of the CBI in connection with Rs 321.88 crore of alleged loan default case registered by the agency against Nirav.
The CBI questioned chief financial officer of Nirav's company Firestar Diamonds International Ravi Shankar Gupta in Mumbai who is accused in the agency FIR in connection with the case. The agency is grilling him to know how the loans were granted and how did diversion of funds happened besides on involvement of senior executives of the PSU banks. The loans of Rs 321 crore were given by two consortium of banks to the companies of Nirav Modi– Firestar International Pvt Ltd – where the Punjab National Bank is the lead bank and the Fires Star Diamonds International Pvt Ltd where Union Bank of India is the lead bank.
“There is a difference between earlier case against Nirav in which letters of undertaking (LoUs) were issued in fraudulent manner and this case where credit limits were sanctioned. In the case of LoUs one can assume that it was handiwork of lower rung of employees but credit facilities are monitored at various senior level officials,” an official said.
Nirav and his uncle Choski, the promoter of Gitanjali group, are accused of swindling Punjab Natinal Bank to the tune of $2 billion (approximately Rs 12,636 crore). Almost all the investigating agencies have come into action after the country's biggest bank fraud surfaced. Enforcement Directorate (ED) has conducted searches at 34 other locations in various cities, including Mumbai, Pune, Aurangabad, Thane, Kolkata, Delhi, Lucknow, Bangalore and Surat, in connection with its probe.
The CBI and I-T department are also scanning documents and mining data to nab the economic offenders. The ED in its raids is learnt to have seized diamonds, gold jewellery and other precious stones worth Rs 5,694 crore till now. Further investigation and raids are on to ascertain the actual scale of the financial bunglings.
In what indicates I-T department's spotlight on the Nirav-controlled firms before the scam unearthed, the tax authorities had raided the celebrity diamond designer's premises in January last year but could not get any link to the fraud.
The search operations were part of the countrywide crackdown to catch the tax-dodgers indulging in laundering black money after government demonetised the high value Rs 500 and Rs 1000 bank notes in November, 2016. During this exercise which went on for months, the taxmen caught dozens of jewellers who used their skills in turning black money into white but Nirav Nirav managed to escape.