The CBI has registered a fresh case against absconding diamantaire Jatin Mehta, Winsome Diamonds and Jewellery and a Jordanian Hathyam Salman Ali Obaidah for allegedly cheating Bank of India to the tune of Rs 82.55 crore, officials said Thursday.
Mehta continued to be Managing Director of the company till April, 2011 when he stepped down from the post and became non executive director for strategic and policy decisions of the company, the Bank of India has claimed in its complaint.
By the time the alleged fraud surfaced, Mehta had left the country and was believed to be in one of the The Caribbean islands, the sources said.
The agency has already filed at least six FIRs against him related to alleged bank frauds.
It is alleged that Bank of India had sanctioned working capital limit of Rs 96 crore to the company in January 2013.
The company had purchased gold from bullion banks abroad -- Bank of Nova Scotia, Standard Bank PLC London and Standard Chartered Bank -- on loan basis against the Standby Letter of Credit (SBLC) issued by Bank of India, the complaint alleged.
The gold bought from bullion banks abroad was processed by the company and sent to 13 buyers in the UAE suspected to be in hand in glove with Winsome Diamonds and its directors, it has alleged.
"These buyers have willfully defaulted in their payments to Winsome Diamonds and Jewellery and eventually SBLCs were invoked by foreign bullion banks resulting in loss to Bank of India," it alleged.
The SBLC is a guarantee issued by a bank assuring other bank that it will make payment in case of default by its client.
"The said bullion banks released the gold under separate gold loan agreements entered with the company against SBLC issued by the Indian Banks in favour of the bullion banks. After manufacturing, jewellery was exported to overseas buyers," the bank said in its complaint to the CBI, which is now part of the FIR.
The company, after getting payments from overseas buyers, repays gold loan availed from bullion banks and the SBLC automatically reverses on confirmation by bullion banks.
In 2013, four SBLCs issued by Bank of India worth over Rs 87.17 crore were invoked by the bullion banks for non payment of loan by Winsom Diamonds, it said.
It is alleged by Bank of India that Jordan national Obaidah was controlling all the 13 UAE based buyer firms through a power of attorney.
It is alleged that he cheated Bank of India by diverting the bank's funds, causing wrongful loss of Rs 82.55 crore to the bank.
The banks declared account of Winsome Diamonds and Jewellery as non performing asset on June 30, 2013 and declared it fraud on December 3, 2015.
Using funds from the banks, Mehta had made huge investments in real estate or setting up family business in the name of Gemesis in Singapore, it alleged.
The company did not do any bullion trade in the year ending March 31, 2013 and the funds were diverted to Gemesis, an artifical diamond manufacturing company owned by Mehta family, it was alleged.
The bank has alleged it was never revealed that Obeidah had power of attorney to control 13 UAE based buyers which came to the knowledge of lender banks only at the time of visit to Dubai by Standard Chartered Bank on April 18, 2013 and subsequently by five members of core committee of lenders on May 23 and 24, 2013.
Nine new customers of Dubai were introduced to the company at the instance of Obeidah. These customers caused dues of Rs 3,808 crore towards Winsome Diamonds and Jewellery as on March 31, 2013 and very negligible amount could be recovered by the company, the banks alleged.
"The selection of these nine new customers by Jatin Mehta was either deliberate attempt in connivance with Haytham Salman Ali Abu Obaidah or a faulty selection of customers which led to misappropriation and siphoning of funds aggregating Rs 3,808 crore," it said.
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