I-T report red-flagged Nirav Modi, Choksi dealings months before PNB scam

The crucial report was finalised eight months before the PNB scam came to light, but was not shared with other agencies as there was 'no protocol' for sharing this at that time

A crucial Income Tax investigation report, prepared 8 months before the PNB scam, on fugitive diamond jewellers Nirav Modi and Mehul Choksi highlighting bogus purchases, huge over-valuation of stocks, suspicious payments to relatives, dubious loans among other information was not shared with other law enforcement agencies as there was “no protocol”, The Indian Express has reported.

The report said the tax department, before February 2018, also did not share its findings through the Regional Economic Intelligence Council (REIC), a mechanism for sharing of information between various law enforcement agencies

The tax department report on Nirav Modi and Mehul Choksi, which ran into around 10,000 pages, was finalised by the agency on June 8, 2017.

 

However, it was not shared with other agencies like the Serious Fraud Investigation Office (SFIO), Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and the Directorate of Revenue Intelligence (DRI) until February 2018, when the Punjab National Bank (PNB) scam became public, according to the report.

The tax investigation appraisal report on Modi and Choksi was not shared with other agencies because there was “no protocol” for sharing such reports with other agencies at that time, the report said citing a senior tax official.

“After the Nirav Modi and Mehul Choksi scam, since July-August 2018, the tax department has been asked to share all investigation appraisal reports with the Financial Intelligence Unit (FIU), which in turn shares these with other agencies for investigation and appropriate action,” the tax official told The Indian Express. 

“Since July-August, we are sharing information and investigation reports on real time basis,” the official said.

Modi and Choksi had left India in early January, weeks before the scam caught public attention.

Interestingly, the findings of the tax probe have now been mentioned by the CBI and ED in their chargesheets filed against Modi and Choksi between May and July 2018.

The Income Tax department, on January 14, 2017, searched Modi’s firms and surveyed companies owned by his maternal uncle Choksi. The search and survey covered at least 45 residential and commercial premises across the country.

Nirav Modi, Mehul Choksi, and their three partnership firms, Diamond ‘R’ US, Solar Exports and Stellar DIamonds, are accused of routing Rs 135-billion worth of fraudulent transactions through state-owned Punjab National Bank.