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PNB scam fallout: NCLT reserves order in the Gitanjali Gems case

After nearly three hours of argument, the bench of B S V Prakash Kumar and Ravikumar Duraiswamy decided to reserve their order on the applications

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Income Tax,enforcement directorate, ED,Gitanjali groups,SEZ, income tax act, Mehul Choksi,Punjab national bank, PNB, Enforcement Directorate (ED), Prevention of Money Laundering Act (PMLA), diamond merchant nirav modi, jewellery designer nirav modi,
Security guards stand inside Nirav Modi showroom in New Delhi (Photo: Reuters)

A bench of the (NCLT) here on Monday reserved its order in the Gitanjali Gems case, in an application by the latter’s (former) independent directors (IDs) for relief.

These IDs of the scam-hit and Mehul Choksi-owned jewellery have been summoned by investigators in connection with the letters of undertaking (LoU) scandal. The IDs involved include Gautham Mukkavilli, formerly of PepsiCo, Suresh Senapaty, who used to work with Wipro, and Sanjay Rishi of American Express.

Investigators at the enforcement directorate, income tax department and Central Bureau of Investigation, as well as at the Serious Fraud Investigation Office, have been looking into the activities of several current and former employees, including the IDs on the board. The IDs are contending that their involvement with the scam-hit entities were for a short period and that their role and responsibilities were limited. So, therefore, are their liabilities for any wrongdoing.

One significant power the investigation agencies have is to ‘freeze’ the assets of any of the accused — land, securities, material property and bank accounts, among others. This may be done even if formal charges have not been framed or a conviction order passed by a court. The IDs have pleaded that this power to freeze assets on suspicion of wrongdoing, collusion or connivance hits their constitutional rights and liberties.

After nearly three hours of argument, the bench of B S V Prakash Kumar and Ravikumar Duraiswamy decided to reserve their order on the applications.

Mehul Choksi, owner and promoter of Gitanjali Gems, and (and his companies) are accused of receiving funds totalling close to Rs 130 billion by manipulating the system of LoUs and foreign letters of credit, issued by Punjab National Bank.

First Published: Tue, March 27 2018. 00:52 IST
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