In a shocker for the Enforcement Directorate (ED), the real value of the diamonds seized by the agency in the Nirav Modi trail is only one-third of the earlier estimated value of Rs 5,100 crore, according to the valuation report.
Initially, the worth of the total seizure and attachment of diamonds, gold, precious and semi-precious stones and other movable and immovable assets in the case was pegged at Rs 7,664 crore. Out of Rs 7,664 crore, the first part of Rs 5,100 crore came from the seized diamonds and the remaining Rs 2,564 from the book value of properties and shares owned by Modi and his uncle Mehul Choksi, both accused in the Rs 13,700-crore Punjab National bank (PNB) fraud case.
The agency is likely to confiscate movable and immovable properties of Modi and Choksi before submitting its charge sheet to the special Prevention of Money Laundering (PMLA) Act court by this month end. But it seems, the figure of Rs 7,664 crore would change.
A source on condition of anonymity told India Today that the valuation report is “quite disappointing”. The real value of these diamonds is one-third of the booked (tagged) value. Percentage-wise, it is expected to be in the range of 30-40 per cent of the total seized value, the source added. If that’s true, then one-third, or let us say 30-40 per cent, of Rs 5,100 crore would come to around Rs 1,700-Rs 2,000 crore. These are diamonds of poor quality and would never fetch the same amount if sold in the open market today, the source further added.
Even when the Central Bureau of Investigation seized some 9,000 chemical vapor deposition (CVD) diamonds from a Surat unit owned by Choksi, their value was pegged at Rs 1.06 crore. But after valuation, they turned out to be worth only Rs 10 lakh.
The valuation report proves that the two rogue jewellers always intended to cheat both banks and customers. Sujay Kantawala, a legal expert in PMLA and FEMA cases, told India Today, “I always had strong doubts about the book value (Rs 5,100 crore). An exporter of diamonds to obtain benefits has a known history of gross over-valuation.”
Kantawala added, “Round-tripping and circular trading is a known fact. Unfortunately, customers of Modi and Choksi must be scratching their heads because they cannot even announce that they purchased it from them.”
“The ED will have to focus on money laundering and sale proceeds of criminal activity aspects, which are more likely to sustain in a court of law”, he added.
Between February and April, the ED carried out its biggest search-and-seizure operation at almost 250 premises across the country-sales office, retail showrooms, manufacturing units, special economic zones and all other third-party branded outlets.
On February 15, the agency went ahead and announced that diamond, jewellery and gem stones worth Rs 5,100 crore were seized.businesstoday