ED gets closer to export scam

MUMBAI, January 15: Investigations into the multi-million dollar Russian exports scam, unearthed by the Enforcement Directorate, Mumbai, las...

MUMBAI, January 15: Investigations into the multi-million dollar Russian exports scam, unearthed by the Enforcement Directorate, Mumbai, last September have reached a crucial stage with the agency having secured statements of several persons who did business with the alleged kingpins.

The ED has recorded a statement of one supplier of computer software which reveals that the operators of the racket, Deepesh and Dharmesh Sheth, allegedly helped him raise bogus bills. The Sheths run a number of companies, including Ditco Financial Services and Ditco Overseas Corporation.

The Sheths allegedly used these bogus invoices raised against purported exporters to show exports to Russia under a fraudulent forex remittance racket.

The purported supplier, one Aggarwal, has admitted that he raised bogus sales invoices of software on four companies: Kunal Exports, Pratibha Holdings Limited, both based in Mumbai, India Power Cables Limited, Indore and Mini Comp Limited, also in Mumbai. He had solicited information about these companies from the Sheths in 1994, when he came out with a public issue of his company.

Sources told ENS that Aggarwal had apparently done this to dress up his company8217;s accounts in its first year of the public issue of his company, knowing well that they were being misused by the Sheths. Dharmesh Sheth had earlier admitted that such invoices were used, though no software was actually supplied.

The scam involves the remittance abroad of seven million US dollars through foreign accounts in banks in Switzerland and New York. Indian currency was raised by the Sheth brothers in India from exporters here, and sent through the hawala channel to be remitted into the account of one Sovincom, a Russian company, which purportedly arranged the letters of credit for the exports.

While most of the exports were highly over invoiced, some of the business was based on totally bogus exports, particularly of rough and cut diamonds. The alleged racket relates to transactions between 1994 and 1996.

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In October 1997, the ED raided the offices and residential premises of Deepesh Sheth, Bhavesh Sheth, Dharmesh Sheth, and their father Pravin Sheth.