Here's how the diamond businessmen got into a legal soup.
Recently, one of India's biggest fraud cases was unearthed. If we look at some cases in the past there is a trend of how top diamond-dealing businessmen have been involved in money laundering cases.
Here's how the diamond businessmen got into a legal soup
Nirav Modi
Nirav Modi is currently the centre of the PNB fraud case, which is still being unfolded. The top officials of the Nirav Modi group conniving with bank officials, got hold of fraudulent Letters of Understanding (LoUs) which can be issued by banks. LoU is a issued by a bank to the branches of other banks, based on which foreign branches offer loans or credit to buyers. Using this loophole and coupled with supervision lapses at PNB and failure of internal controls, the case persisted for seven years. The case came to notice last month on January 25, according to PNB's MD and CEO Sunil Mehta. Nirav Modi is believed to have left the country and was reportedly spotted in New York.
Jatin Mehta
The Winsome Diamonds and Jewellery's Jatin Mehta case unfolded in 2014 and finally came to an end in 2017. Mehta owes its lenders Rs 6,800 crore and had co-operated with the investigation agencies. The banks had given guarantees - Standby Letters of Credit (SBLC) to the firm for the gold they had bought from foreign bullion banks. The loophole here was that if the firm failed to pay the bullion banks, the Indian banks would step in to pay for the gold consignment. However, this loophole failed to bear fruit and the banks lodged complaints to the CBI against the firm. The firm had claimed that their UAE distributors failed to repay them a chunk of the money expected, which was over Rs 4,700 crore.
Bharat Shah
Bharat Shah was probably, unlike the other two mentioned above, did not siphon money but was arrested because of ties with the underworld. Apart from his diamond business, he was also a film financier where he had invested in big-budget Bollywood movies and had strong ties with the industry. The police had recorded 32 telephonic conversations between Shah, gangster Chhota Shakeel and film producer Nasim Rizvi way back in 2000. He was then arrested in 2001 and was awarded one year's of imprisonment. He was convicted in 2003 for concealing information linked to the underworld. The underworld is believed to have made extortion attempts on Bollywood stars, where actress Preity Zinta had also confirmed that she threat calls from the underworld.
