Head office of Winsome Diamonds at Opera House in Mumbai. (Express Photo by Vasant Prabhu)
Investigators probing how PNB scam-accused Nirav Modi may have travelled multiple times on a revoked passport can take a cue from the findings of the Union Home Ministry in a report on how another fraud-accused diamantaire exploited loopholes in passport rules after fleeing the country five years ago.
Officials probing the dual citizenship case of Winsome Group owner Jatin Mehta, who is now a citizen of Saint Kitts & Nevis and is wanted by Indian agencies in a Rs 6,800-crore bank fraud case, have found that one key gap he exploited was specified in a government circular issued in 2009.
“A grace period of three months is allowed from the date of acquisition of foreign citizenship, for the purpose of travel on Indian passport. Therefore, no penalty will be leviable for travel on Indian passport within three months of acquisition of foreign passport,” stated the circular issued by Consular, Passport and Visa (CPV) division of Ministry of External Affairs on March 24, 2009.
Officials linked to the investigation said this clause allowed Mehta to travel multiple times to India after surrendering his Indian passport in Singapore in Winsome vacant, Govt tells IIT-Delhi to draft perspective plan February-March 2013. His last travel on an Indian passport was reported in mid-2013, states the report.
According to rules, if the Indian passport is not surrendered after three years and is used for travel after a foreign passport is obtained, a penalty of Rs 10,000 is levied with an additional penalty of Rs 10,000 for each journey. The rules also state that a fine of Rs 25,000 and Rs 10,000 is levied for each journey on an Indian passport, which is used or renewed or reissued after foreign nationality is acquired.
“There is no penalty if passport is not surrendered up to three years but not used for travel after obtaining foreign passport,” stated the 2009 circular. According to officials, Mehta obtained citizenship of St Kitts & Nevis, which does not have an extradition treaty with India, in November 2012 under a permanent residency status clause for foreign investors.
Sources told The Indian Express that the Home Ministry has suggested amendments to the 2009 circular to ensure stringent punishment for misuse of Indian passport after foreign citizenship is acquired.
The CBI has registered six FIRs against firms of the Winsome Group, and Mehta was declared “willful defaulter” in December 2016.
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According to the CBI, Mehta used seven of his companies to obtain letters of credit from Punjab National Bank, Vijaya Bank and Central Bank of India to purchase gold. A standby letter of credit is a guarantee given by a bank on behalf of the client that it will fulfill a contractual commitment with a third party in case of a payment default.
Among other charges, the CBI alleged that gold was imported and allegedly re-exported to 13 UAE-based companies. In 2016, the Enforcement Directorate attached properties worth Rs 172 crore of Winsome Diamonds and its subsidiaries under the Prevention of Money Laundering Act (PMLA).
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On June 14, The Indian Express reported that Interpol had informed Indian agencies that Nirav Modi travelled four times between three countries as recently as March on a revoked Indian passport.