DRI busts gold diversion racket

HYDERABAD: The Directorate of Revenue Intelligence (DRI) sleuths who arrested Srikrishna Jewellers group vice chairman and MD Pradeep Kumar along with his three associates, on Tuesday, unearthed a gold diversion fraud in the Special Economic Zone (SEZ) located in Raviryala in Maheswaram of Hyderabad.
The DRI said that around 1,100 kg of gold worth Rs 289 crore has been diverted in the past one-and-a-half years by Srikrishna Exim LLP. Pradeep Kumar is one of the four directors of Srikrishna Exim LLP.
As per rules, a company which buys gold from abroad and imports it to an SEZ is supposed to make jewellery out of the imported gold and export it again. The company gets tax exemption on imports and exports. The modus operandi of the company was that it imported gold, but made jewellery with semi-precious stones using fewer gold and exported the same. The tax-free gold saved by the accused is sold in the local market illegally.
DRI seized 21 kg of foreign-market SEZ gold which was misdeclared stock and 6.8 kg of gold jewellery and 491 kg of semi-precious stones, all worth Rs 14.87 crore. DRI in an official statement on Tuesday said, “We mounted surveillance on an SEZ and found that the unit is indulging in fraudulent export of jewellery made from diverted SEZ gold. The unit in question has taken SEZ license for import and export of gold.”
The DRI has been conducting searches from May 3 and grilled several persons. The investigation revealed that Srikishna Exim LLP is misdeclaring export consignment as jewellery studded with semi-precious stones. When DRI sleuths examined the consignment, it was found that it was not jewellery, but crudely-made jewellery of stones with traces of gold in it.
A sample check revealed that the total weight of gold declared was 19 kg and that of semi-precious stones as 2 kg. However, only 565 gm gold was used in the export and the rest 20.8 kg was stones.