Mumbai court allows ED to issue LRs to six countries

Mumbai : A Mumbai special court on Monday permitted the Enforcement Directorate (ED) to issue Letters Rogatory to six countries for identifying and seizing properties of absconding diamond trader Nirav Modi in the Rs 11,300-crore PNB fraud.

The permission was granted by Special Judge M.S. Azmi to the ED to issue the Letters Rogatory (LRs), which is a request from a court of a sovereign nation to the court of another foreign country.

The court's green signal -- marking a significant boost for investigating agencies -- came after Special Public Prosecutor Hiten Venegaonkar sought issuance of LRs under the Prevention of Money Laundering Act (PMLA) vide an application made by the ED.

In the application, the ED said the LRs were required to effect recovery and seizures of proceeds of crime, collection of documents, evidences lying in Hong Kong, Singapore, UAE, South Africa, UK and the USA, which were required in the ongoing investigations into the Punjab National Bank (PNB) fraud.

According to the ED plea, Modi had set up firms -- including Firestar Diamond, Solar Exports, Stellar Diamond, Diamond R Us -- and was engaged in buying rough stones and selling polished stones besides designing jewellery.

With this, he spread his businesses in countries like Hong Kong, Singapore, UAE, South Africa, UK and the USA, apparently managed to get multiple high-value Letters of Undertaking (LoUs) issued in favour of his companies by the PNB, which led to disbursement of funds as per SWIFT messages sent by the bank.

"By this criminal act of cheating and conspiracy, the accused generated huge proceeds of crime amounting to Rs 6,498-crore which had been siphoned off by them and thereby laundered and amalgamated in mainstream financial system to project it as untainted property. Certain part of the proceeds of crime involved in the money laundering are reasonably believed to be parked in countries abroad," the ED plea said.

The development came after the CBI, following a complaint lodged by the PNB, filed a FIR against Nirav Modi, his uncle Mehul Choksi, their companies and others in the case.

So far, the CBI has arrested 12 persons in connection with the scam.