ED arrests Nirav Modi's close confidante Shyam Wadhwa in PNB fraud case

Arvind Ojha and Virendrasingh Ghunawat         Last Updated: March 28, 2018  | 14:48 IST
ED arrests Nirav Modi's close confidante Shyam Wadhwa in PNB fraud case

In the Rs 13,700 crore PNB Fraud case, the Enforcement Directorate (ED) made its first arrest and 19th in the scam. On Tuesday, the ED team arrested Shyam Sunder Wadhwa, vice president (finance), Firestar Group and close confidante of main accused Nirav Modi, under Section 19 of Prevention Of Money Laundering Act, 2002. As per ED sources, Wadhwa assisted Modi in the offence of money laundering and is punishable under the money laundering act.
 
During the investigation and interrogation with Wadhwa, he confessed before the agency that he had done the paper work pertaining to the formation of shell companies named Sino Traders and Aura Gems and floated it abroad. Wadhwa also made Kartik Doshi and two others as dummy directors and shareholders of these bogus companies by getting them to sign on relevant papers.

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According to ED, Wadhwa was in close touch with Modi and "he is also involved in money laundering on behest of and in the aid of Modi". ED believes, Wadhwa is also privy to various confidential information which would help in unravelling the truth behind this mega-scam.

In its remand copy, ED has said that during interrogation, Wadhwa has not thrown any light on the functioning or financials of the company even in the most general way. "He tried to mislead the investigation by initially stating that he has not interacted with anyone of the dummy directors where the proceeds of crime has been siphoned off", the remand copy stated.
 
When confronted, Wadhwa stated that on instruction if Nirav Modi, he made Kartik Doshi, Divyesh Gandhi and Sonu Mehta - the bogus directors and owners of these shell companies.
 
As per the records, substantial amount of around USD 34.6 million and USD 56.5 million was paid to Sino Traders and Aura Gems company Ltd from the LoUs fraudulently issued by PNB for the Modi group of companies (Solar Exports, Stellar Diamonds and Diamonds R US). On Tuesday, ED conducted searches on Wadhwa's residence and later, in the evening, he was arrested.