The Enforcement Directorate (ED) has registered two fresh money laundering cases against Winsome Diamonds and Jewellery Ltd, one of the top wilful defaulters, and its former promoter Jatin Mehta, who left India in 2013 and became citizens of Saint Kitts and Nevis, a Caribbean nation known to be a popular tax haven.
Winsome Diamonds and its subsidiaries owe nearly Rs 10,000 crore, including interest, to a consortium of 15 banks led by Standard Chartered and Punjab National Bank (PNB). It also figured in the list of top 10 bank loan defaulters that former RBI Governor Raghuram Rajan sent to the Prime Minister’s Office (PMO) in 2015 seeking “concerted” action.
Sources said the two new money laundering cases are based on complaints filed by Bank of Maharashtra (BoM) and Union Bank of India with the Central Bureau of Investigation (CBI) last year.
According to the complaints to the ED, Winsome Diamonds owes Rs 323 crore to BoM and Rs 400 crore to Union Bank. Both banks have alleged that the company was involved in “round tripping” of assets for loan and “white smuggling”. They also alleged that Winsome Diamonds, a jewellery exporter, indulged in “paper transactions as gold was only exported through fake invoices” to distributors related to the firm. They also alleged that Winsome Diamonds invested the loans into two real estate firms, Saumya Constructions Pvt Ltd and Shrishti Infrastructure Development Corporation Ltd. The firm also “manipulated” its books of accounts , said the banks, adding that the main beneficiaries of the loan funds were Mehta and 10 subsidiaries of Winsome Diamonds.
The company has now been referred to the bankruptcy court for liquidation. The Directorate has so far attached assets worth Rs 220 crore of Winsome Diamonds under the Prevention of Money Laundering Act (PMLA) as proceeds of crime and has found that the firm allegedly diverted at least $750 million (Rs 5175 crore) to six entities in Hong Kong, Bahamas and UAE, directly or indirectly controlled by Jatin Mehta, through a web of ‘dummy companies’.
Winsome Diamonds and Mehta are being investigated by the ED, CBI and Serious Fraud Investigation Office (SFIO).
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