Agencies probing the alleged Rs 13,400 crore fraudulent transactions carried out by the firms of diamond jewellers Mehul Choksi and Nirav Modi at Punjab National Bank are looking into the role of Sunil Varma, head of International Business at Gitanjali Gems Ltd as they suspect that he allegedly played a “crucial role” in executing the fraudulent letter of undertakings (LoUs) for allegedly reaping ‘“interest arbitrage”, sources told The Indian Express.
Interest Arbitrage essentially involves deployment of funds to take advantage of the difference in interest rates l between two countries or two systems.
Varma, 50, sources said like Choksi and Modi left India a few days before the scam at PNB broke. According to a source, Varma, the former chief financial officer (CFO) of Gitanjali Gems could be in the US. Sources said that the probe agencies have summoned Varma for questioning in the case.
The Indian Express could not reach Varma for a comment. Choksi’s lawyer Sanjay Abbot declined to comment.”I have no knowledge about this and so I cannot comment on the issue,” said Abbot.
According to the 2017 annual report of Gitanjali Gems, Varma is the highest paid executive of the company, who’s salary is even higher than that of Choksi, the chairman and managing director of the company. In 2016-17, Varma earned Rs 1.12 crore while Choksi got Rs 1.1 crore. The report shows that Varma was part of the borrowing committee, investment committee, allotment committee and administrative committee of Gitanjali Gems since 2010.
Varma joined Gitanjali in December 2009 as its CFO. In 2012 he became the whole time director of the firm. A year later, Varma went on to head the international business of Gitanjali Gems and “took complete charge of overseas business affairs of the company”.
Varma, a commerce graduate from Mumbai University, holds a management degree from the University of Chicago. Till November 2013, he was responsible for “overseeing the day-to-day operations” of the Gitanjali Gems with focus on finance, accounts, taxation, legal and other areas, said the annual report of the company. Varma was also responsible for preparing and presenting the strategic annual business plan to the company’s board.
The National Company Law Tribunal (NCLT) on February 23, allowed the government to attach 64 properties belonging to individuals as well as companies that are part of groups headed by Modi and Choksi. Varma is one of the individuals whose properties have been ordered to be attached.