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Saturday, July 21, 2018

CBI examines ex-RBI officer on scheme it suspects aided Nirav Modi, Mehul Choksi

The CBI suspects the scheme benefited diamantaire Nirav Modi and his uncle Mehul Choksi who are at the centre of a probe into alleged fraudulent transactions of over Rs 13,000 crore at the Punjab National Bank (PNB).

Written by Rashmi Rajput | Mumbai | Updated: April 7, 2018 4:11:15 am
CBI questions former RBI Deputy Governor on Nirav-Choksi case Sources said RBI officials were called in as “we wanted to understand the 80:20 scheme concerning jewellery imports. During the interaction, they told us that the scheme was introduced in 2013 and and rules were eased just days before the government’s tenure ended in May 2014”.

The CBI, which examined former RBI deputy governor H R Khan Friday, plans to write to the Ministry of Finance for details of the 80:20 scheme related to jewellery imports.

The CBI suspects the scheme benefited diamantaire Nirav Modi and his uncle Mehul Choksi who are at the centre of a probe into alleged fraudulent transactions of over Rs 13,000 crore at the Punjab National Bank (PNB).

Officials said the agency’s scrutiny of the 80:20 scheme was limited only to the PNB case. “The questions concerned only the said cases,” an official said. Sources said Khan was asked about the 80:20 scheme.

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(ENS adds from New Delhi: Khan told The Indian Express “it will be wrong to say that CBI has questioned me… CBI had an enquiry about a particular circular issued by the RBI based on advice received from the Ministry of Finance in 2014. It was regarding certain changes in the 80:20 gold import scheme at the time. The CBI didn’t raise any other issue regarding the reported scam in PNB”.)

Sources said RBI officials were called in as “we wanted to understand the 80:20 scheme concerning jewellery imports. During the interaction, they told us that the scheme was introduced in 2013 and and rules were eased just days before the government’s tenure ended in May 2014”.

The notification laid down conditions under which Star Trading Houses/Premier Trading Houses (STH/PTH), registered as nominated agencies by the Director General of Foreign Trade (DGFT), could import gold under the 80:20 scheme.

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“We now are planning to write to the Finance Ministry to understand the purpose behind introducing the scheme and the May 21, 2014 notification. We will seek details on the proposal and representations made,” sources said.
While 80 per cent of gold imports under the scheme (India is one of the biggest importers of gold globally) were allowed to be sold in the country, at least 20 per cent of imports had to be exported before importers could bring in new consignments. The permission to import the next lot was to be given the export obligation was fulfilled. The policy was aimed at discouraging gold imports to rein in the widening current account deficit.

The CBI also claimed to have pieced together a financial trail which allegedly shows that the money raised through LoUs and Foreign Letters of Credit (FLC) was routed through “front companies” to either purchase assets or pay off outstanding LoUs.

“The overseas branches of the Indian banks credited funds in the Nostro account of PNB on the LoUs opened by the PNB. The funds were then routed to the beneficiary companies by PNB which we suspect are front companies created for the purpose of laundering money. These beneficiary companies were shown as importers by the accused. We found 17 such companies in case of Modi and five in case of Choksi. Most of the 17 companies are based in Hong Kong. In case of Choksi, while two companies are based in Hong Kong, one each is in Bangkok and Abu Dhabi,” a CBI official said, adding “we have sent Letters Rogatory to these countries, seeking details. Their replies will act as our evidence”.

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