Focus on nine more banks over money laundering issue

ED report names Axis Bank, DCB Bank, Dhanlaxmi Bank, ICICI Bank, IndusInd Bank, ING Vysya Bank, Kotak Mahindra Bank and YES Bank

Investigations by the Enforcement Directorate (ED) in the Bank of Baroda (BoB) case have brought to light a larger trade-related money laundering racket that misused nine banks for illegal overseas transfers of close to Rs 557 crore over the course of eight years.

Cracking another module in the case, ED on Thursday arrested Manish Jain for alleged involvement in the illegal transfer of funds abroad between 2006 and 2014 through the Oriental Bank of Commerce and eight other banks.

Jain had 66 accounts in the Oriental Bank of Commerce, Rajpur branch in Ghaziabad and close to Rs 505 crore were deposited and remitted abroad from these accounts between 2006 and 2010.

Eight other banks — Axis Bank, DCB Bank, Dhanlaxmi Bank, ICICI Bank, IndusInd Bank, ING Vysya Bank, Kotak Mahindra Bank and YES Bank — were used by Jain for illegal transfers between 2010 and 2014, the investigation has revealed.

When contacted, none of the banks wanted to comment on the issue on the grounds that they have not received any official communication yet.

“Investigations are on and these figures are likely to go up,” said ED in a statement issued on Thursday.

Meanwhile, Finance Minister Arun Jaitley said the magnitude of the alleged black money transfer through state-owned BoB will only be known after completion of the multi-disciplinary probe.

“It’s a matter of investigation and it is some unscrupulous people who have managed to beat the system,” Jaitley said, when asked in an interview to a TV channel if he expects involvement of more banks in this issue.

Jain had two firms in Hong Kong — Tanvi Enterprises and Pacific Exim — that allegedly deposited unaccounted cash in the banks in India and transferred the money to HSBC in Hong Kong. This was then used to settle unaccounted dues of various Indian importers with Chinese suppliers.

Investigators zeroed in on Jain after the arrest of Sanjay Aggarwal in a Rs 6,000-crore fraud through BoB and HDFC Bank.

From 2006 to 2014, Jain operated the company PR Forex, which was involved in sending remittances for export and import houses through banking channels. In 2014-15, Aggarwal started operating the company. The fraud through BoB and HDFC Bank began in January 2014, initial investigations have revealed.

The directorate has also identified a group of individuals, led by Rajiv Wadhwa, for involvement in sending illegal remittances.

“Foreign exchange of Rs 557 crore has been sent out of India from 11 bogus firms under the guise of imports.  Some of the companies are Daksh Impex, Pacific Exim (India), Alaska Trading, Aadinath Exim (India), Apple Computers, Sai International and Jai Bharat Impex,” the Enforcement Directorate statement said.

The Central Bureau of Investigation and ED are probing the case after an internal investigation by BoB showed Rs 6,172 crore was sent from India to Hong Kong for import of cashewnuts, pulses and rice, but nothing was imported and the money was deposited in bank accounts of several companies.

The Serious Fraud Investigation Office has initiated a probe into the alleged Rs 6,100-crore black money transaction case involving a Delhi branch of BoB. “Besides CBI and ED, SFIO has also initiated a probe into the BoB matter,” a senior Finance Ministry official said.

BANKS UNDER THE SCANNER

• Axis Bank
• DCB Bank
• Dhanlaxmi Bank
• ICICI Bank
• IndusInd Bank
• ING Vysya Bank
• Kotak Mahindra Bank
• Oriental Bank of Commerce
• YES Bank

Note: List in alphabetical order

Source: Enforcement Directorate