Three fresh FIRs have been filed by the CBI against absconding diamantaire Mehul Choksi on the basis of a complaint from the Punjab National Bank (PNB), bringing to light an additional loss of Rs 6,746 crore incurred by it and other banks of a consortium, officials said.
Four years after Choksi's dramatic escape and the failure of the state-run PNB to detect the scam between 2010 and 2018, the bank submitted three complaints to the CBI on March 21, reporting the additional loss caused by the diamantaire and his firm Gitanjali Gems Limited, Nakshatra Brands Limited and Gili India Limited.
The PNB and the other members of the consortium had extended credit facilities to these companies.
Choksi's counsel Vijay Aggarwal told PTI that it was a "witch hunt".
"When one FIR has been lodged and a chargesheet filed for the total loss to the banks, how can there be a separate FIR now for every small transaction?" he asked.
"Going by that logic, if they claim a total loss of Rs 13,000 crore, they should lodge an FIR each for every single rupee," Aggarwal said, wondering whether there could be one FIR each for every brick laid for the illegal construction of a wall.
"This is why prosecution cases fail. Many mountains were made out of mole hills earlier. The case is like dead for years. It has not moved an inch in the trial court. So the truth will never come out," he said.
Aggarwal said there is a vigilance manual circular that says the consortium can get only one FIR lodged. Each consortium member cannot lodge separate FIRs, he claimed.
The Central Bureau of Investigation (CBI) has filed the cases against Choksi, who has taken refuge in Antigua and Barbuda after his escape from India in the first week of January 2018, days before the scam allegedly perpetrated by him and Nirav Modi surfaced, the officials said.
Diamond merchant Modi, held in a UK prison, suffered a setback in his legal battle against extradition on Thursday as a London court denied him permission to appeal against the move in the UK Supreme Court.
The first CBI FIR pertains to an alleged fraud of Rs 5,564.54 crore between 2010 and 2018 perpetrated by Choksi, Gitanjali Gems Limited and its senior executives on a consortium of 28 banks led by the ICICI, the officials said.
"It appears that in the account of Gitanjali Gems Limited, fraudulent activities were done by Mehul Choksi in connivance with its director Dhanesh Vrajlal Sheth, joint president (finance) Kapil Mali Ram Khandelwal, CFO Chandrakant Kanu Karkare and others to enrich themselves illegally and derive unlawful and unjust gains and thereby, causing a loss to the member banks of the consortium and in furtherance thereof, have cheated/defrauded the consortium member banks to the tune of Rs 5,564.54 crore," the PNB has alleged.
The bank, in its complaint that is now a part of the FIR, has alleged that Choksi and the other accused "were involved in the fudging of accounts, siphoning off funds and utilising the sanctioned credit limits not for genuine trade transactions".
The second FIR pertains to alleged cheating to the tune of Rs 807 crore by Choksi, Nakshatra Brands Limited and others during the period, involving a consortium of nine banks led by the PNB, the officials said.
They said the third FIR pertains to an alleged fraud worth Rs 375 crore committed by Choksi and Gili India Limited on the PNB during the same period.
Choksi took the citizenship of Antigua and Barbuda in 2017, where he has settled since he fled India in 2018.
He and Modi had allegedly pulled off the biggest banking scam of that time by availing loans from foreign banks using letters of undertaking, a kind of bank guarantee, from the PNB.
These guarantees were not allegedly entered into the core banking software of the PNB by its employees who were party to the crime.
The officials said these loans were not repaid, bringing a liability of more than Rs 13,000 crore on the PNB in 2018.
Since 2018, the CBI has filed at least seven FIRs and several chargesheets against Choksi, they said.
Choksi and Modi fled the country days before the PNB approached the CBI with its complaint in January 2018.
In Modi's case, in a judgment order pronounced at the Royal Courts of Justice in London, Lord Justice Jeremy Stuart-Smith and Justice Robert Jay denied permission to the appellant to appeal to the Supreme Court.
Choksi's stay was shaken last year when he was found in neighbouring Dominica under suspicious circumstances. India had dispatched all possible legal arsenal to bring him back, but the fugitive diamantaire got bail from local courts, which allowed him to travel back to his sanctuary in Antigua and Barbuda.
The case of illegal entry into Dominica has also been dropped by a court there.
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