The Enforcement Directorate (ED) is probing 120 shell companies allegedly linked to jeweller designer Nirav Modi and Gitanjali Group chief Mehul Choksi even as Income Tax officials claimed to have found two companies linked to Modi that had received Rs 555 crore from companies in Cyprus, Mauritius and Singapore between 2013 and 2014.
"The agency is investigating 79 shell companies owned by Gitanjali Group chief and 41 companies owned by Modi in India," an ED official told IANS on condition of anonymity.
He also said that the agency is examining if the money taken from the bank was diverted to these shell companies.
Modi and his uncle Choksi, along with directors of the Modi and Gitanjali groups are under investigation by the Central Bureau of Investigation and the ED for allegedly committing fraud amounting to Rs 11,300 crore against PNB, whose Letters of Undertaking and Foreign Letters of Credit were illegally used to raise and rollover money. Both Modi and Choksi, along with other family members are said to have left the country in early January this year.
The FIR also named two former bank employees said to be directly involved in the fraudulent transactions.
Additionally, three companies of Gitanjali Group were also named in the second CBI FIR for allegedly defrauding PNB of Rs 4,886.72 crore.
Based on the documents seized during searches last year, IT officials claimed to have found that Modi's Firestar International Pvt Ltd had received Rs 284 crore from two companies based in Cyprus and Mauritius between 2013 and 14 in the form of share capital and high share premium.
The department found evidence during searches that showed that documents claimed to be submitted by these foreign entities were prepared in Modi's office. The source of funds and creditworthiness of the overseas companies were not explained properly, the IT department said in its report.
Further, Firestar International had received foreign funds worth Rs 271 crore from Singapore-based company Islington International Pte Ltd, whose beneficial owner is stated to be Nirav Modi's sister Purvi Mehta. The IT department said the asssess had not been able to provide necessary supporting documents of creditworthiness of Purvi Mehta or Islington. "The source of funds also remains suspicious," the report by the investigative arm of income tax said.
Meanwhile, ED officials have hired experts to ascertain the value of the items seized during the raids. Till Saturday, diamonds, gold and jewellery said to be valued at Rs 5,674 crore had been seized. ED officials said the valuation was done by them based on stock value and market value at showrooms.
The ED had on four days from Friday conducted raids at 141 locations across India in connection with the PNB fraud. The agency officials said that soon it shall issue letter rogatories to other countries seeking information on Modi's transactions.
The agency also said it would look into the reports submitted earlier by the Income Tax department.
During a raid by the Director-General of Income Tax (Investigations) in January 2017, it was learnt that 2016-17, the Modi group had illegally diverted Rs 1,216 crore worth of diamonds meant for export from its special economic zone in Surat to the domestic market, selling them in cash.
It had found that the units in the SEZ diverted high quality diamonds imported for processing and export, to the domestic market for huge profit. Instead, low-quality diamonds were exported to associate units abroad to keep up the appearances.
"We have asked for the full details about the IT cases against Modi," the ED official added.
The IT department, in a appraisal report last year had also flagged several suspected irregularities on the part of the Modi group of companies.
In the report, IT sleuths mentioned that the group accepted cash from customers for sale of jewellery and diamonds that were over and above the sale consideration as recorded in the account books.
The IT authorities had confronted Modi with their findings but they did not get a satisfactory explanation.
It said that during the check period, the agency found cash receipts of over Rs 158 crore.