Surat: Gitanjali Group owned by Mehul Choksi has lost its prestigious sightholdership with the world’s leading diamond mining company De Beers following his involvement in India’s biggest bank fraud along with his billionaire nephew Nirav Modi.
In an article published in TOI on February 22, 2018 under the heading ‘Gitanjali may lose De Beers sightholder status’, De Beers group had clarified that the company won’t do business with firms not complying with financial propriety and industry reputation issues.
In a latest reply, De Beers group spokesperson David Johnson said, “Gitanjali is no longer a sightholder of De Beers. We have removed Gitanjali’s name from our customer directory on global sightholder sale (GSS).”
Mehul Choksi, chairman and managing director (CMD) of Gitanjali Group, is alleged to have defrauded Punjab National Bank (PNB) to the tune of over Rs 6,100 crore in the matter of issuance of unauthorized and fraudulent Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) in favour of foreign suppliers of accused companies.
Barring a few, most of the companies to which FLCs and LOUs were issued by PNB are syndicate companies in the close circles of Mehul Choksi and Nirav Modi. In order to avoid detection of fraudulent deals, accused bank officials, Choksi and directors of the companies deliberately omitted making entries of LoUs in the core banking system (CBS) of the bank.
Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) have filed separate FIRs and ECIR against Gitanjali Group companies, including Gitanjali Gems Limited, Gili India Limited and Nakshatra Brands Limited.
Losing De Beers sightholdership will be a big blow to Gitanjali as a brand worldwide. Being a De Beers sightholder is something diamond companies in India and around the world take pride in. In every advertisement, endorsements and during public events, a sightholder company displays the DTC logo, which affirms the authenticity and reputation of the diamond company.
Gitanjali Group had acquired Nakshatra Diamonds, a premium brand owned by De Beers group's Diamond Trading Company (DTC) in 2008.
Diamond analyst Aniruddha Lidbide said, “For Gitanjali Group, it is an end of the diamond story as De Beers has cancelled its sightholder status. The action by De Beers has spread panic among other sightholders. They will now religiously follow best practice principle (BPP) standards of De Beers.”
