In its probe of the money trail in the Rs 127-billion letters of undertaking (LoU) fraud in Punjab National
Bank (PNB), the Central Bureau of Investigation (CBI) has found that Rs 45 billion was diverted to the Mehul Choksi group of firms.
Prima facie evidence showed that the transactions had been routed through shell firms. “We have come across a series of connected financial transactions and exchange of funds between Choksi and Modi companies,” said an investigating officer.
The probe was underway, and the agency was yet to get the entire information of Nirav Modi’s operations overseas to establish the entire money trail, said the officer.
The findings along with the evidence of the money trail had been shared with the Enforcement Directorate (ED), he added.
According to another source, the CBI found that the funds received through fraudulent LoUs travelled through various banks to reach the beneficiary. “It was done through multiple transactions, so we are following the trails even if transactions were split,” the official said.
He revealed that there was layering of money and the way it was executed clearly showed that both Choksi and Modi were working in coordination in all their business-related transactions. A majority of such transactions took place in the UAE and Hong Kong, while some funds also found their way to New York.
Sources in the CBI said over 120 shell companies in India and overseas were used by the two jewellers and these transactions were under scrutiny. The income-tax department has been roped in to investigate these shell firms, suspected to have indulged in routing illicit funds.
Armed with CBI’s money trail information, the ED would now look into the proceeds of crime and whether the multiple transactions were done purportedly to launder money.
An ED source said, “We have asked the Reserve Bank of India (RBI) to get the possession of unique transaction reference numbers of certain transactions. At present, there is no such provision for sharing unique transaction numbers with probe agencies.”
This data would help central agencies to identify transactions in any electronic form like real-time gross settlement or national
electronic funds transfer. Typically, this data is available with the remitting and receiving banks. These banks send monthly data of all such transactions to the RBI.
Sources said once the probe agencies got the data, they could easily confiscate deposits of all involved.