Mehul Choksi's Son 'Actively' Involved In Money Laundering: Probe Agency ED

Nearly eight years after the investigation against fugitive diamond trader Mehul Choksi began in the Punjab National Bank (PNB) fraud case, the Enforcement Directorate (ED) has, for the first time, formally claimed that his son Rohan Choksi was also actively involved in the money laundering. The ED made this assertion before the Appellate Tribunal in Delhi.

Rohan Choksi's name, however, had neither appeared in any First Information Report (FIR) nor has he been made an accused in any Prevention of Money Laundering Act (PMLA) case registered by the CBI or the ED.

In its written submissions before the tribunal, the probe agency stated that Mehul Choksi was a director in several companies that existed only on paper. According to the agency, these shell companies were created to show fictitious transactions and to route proceeds of crime, without any actual purchase or sale of goods.

The agency further told the tribunal that Rohan Choksi holds a 99.99 per cent shareholding in another company, Luster Industries Private Limited, in which Mehul Choksi is a director. The investigation revealed that this company was used to divert funds abroad.

According to the ED, the probe also found that an amount of USD 127,500 (around Rs 81.6 lakh) was transferred from Asian Diamond and Jewellery FZE to Singapore-based Merlin Luxury Group Private Limited. The ED claims that Asian Diamond and Jewellery FZE directly transferred the proceeds of crime to this company.

The agency informed the tribunal that the Singapore-based Merlin Luxury Group was also under the control of Mehul Choksi and was being operated through Luster Industries Private Limited. Therefore, the agency argued that since Rohan Choksi holds a 99.99 per cent stake in the company, he cannot escape the attachment of assets.

It contended that all facts and evidence on record clearly indicate that Rohan Choksi was actively involved in the offence of money laundering along with his father. On this basis, the agency justified the attachment of assets linked to Rohan Choksi.

The ED's latest claim has once again raised questions about whether the agency is now preparing to expand the scope of the investigation to other family members.

Mehul Choksi and his nephew Nirav Modi are the prime accused in the scam, being probed by both the CBI and the ED. They are accused of siphoning off over Rs 13,000 crore from the Punjab National Bank (PNB) using Letters of Undertaking and Foreign Letters of Credit by bribing officials at the bank's Brady House branch in Mumbai.

Choksi fled India in January 2018, days before the Rs 13,000 crore fraud in the PNB was detected.

He is now facing extradition proceedings in Belgium, while Nirav Modi is lodged in a London jail.