The racket was unearthed after the DRI recently conducted raids at the BDB at Bandra Kurla Complex (BKC) here following a tip off and intercepted consignments of rough diamonds of "low quality" with a declared value of Rs 156 crore.
However, a revaluation of these diamonds found that they were worth only about Rs 1.2 crore.
"The revaluation done by experts ascertained that these rough diamonds were of inferior quality and worth only about Rs 1.2 crore, against their declared value of Rs 156 crore," an official said.
During the probe, it came to light that these rough diamonds were imported from overseas markets like Hong Kong and Dubai in connivance with the exporters and they were shown to have been procured at grossly overvalued prices, he said.
Four people have been arrested so far and cash worth Rs 10 lakh, demand drafts amounting to Rs 2.2 crore, cheque books, Aadhaar cards and PAN cards were recovered during the raids, he added.
The four arrested accused, with the help of some members of the panel of diamond valuers, used to get the declared value of the consignments approved as the fair value, the official said.
"No one in the industry had heard of these arrested valuers and we are surprised how they were valuing diamonds. Our industry is very small and people know each other," he said.
Shah said that valuers also work with the customs department, where nobody from the industry is allowed.
"Inside, there is no role of any trade body," he said.
"In a day or two things will become clear and we have full confidence in the investigating agencies and government departments," he added.
The arrested valuers were not approved by the GJEPC, he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)