Rs 12,000 crore gold import fraud unearthed in Kolkata, kingpin arrested

Shree Ganesh Jewelry House promoter Nilesh Parekh, was arrested by DRI sleuths on Friday for allegedly siphoning off 1,700 kg of imported duty-free gold and defrauding 25 banks.
Image for representational purpose only.
Image for representational purpose only.

KOLKATA: In a fraud that matches the multi-crore PNB scam in size, a Kolkata-based gold businessman allegedly cheated a consortium of 25 banks to the tune of Rs12,000 crore, according to Directorate of Revenue Intelligence (DRI) officials.

The alleged mastermind behind the fraud, Shree Ganesh Jewelry House promoter Nilesh Parekh, was arrested by DRI sleuths on Friday for allegedly siphoning off 1,700 kg of imported duty-free gold and defrauding 25 banks. He was sent to eight days judicial custody on Saturday.

This is not the first time Parekh got on the wrong side of the law. In May 2017, the Central Bureau of Investigation (CBI) had arrested Parekh over charges of siphoning off bank loans worth Rs 2,672 crore through hawala channels to dummy companies in Singapore, Dubai and Hong Kong.

According to the complaint by the lenders' consortium led by State Bank of India, Parekh showed huge profits in bogus firms to secure loans from various banks and later claimed the firms had gone bankrupt and were shut down.

During the course of investigation, CBI and DRI found that between 2005 and 2015, Parekh imported 35,746 kg of duty-free gold through his gold firm in Manikanchan Special Economic Zone in Kolkata's Salt Lake but exported only 34,041 kg of finished jewellery, making 1,705 kg of imported duty-free gold unaccounted for.

The Reserve Bank of India has stated that Parekh's Shree Ganesh Jewelry House has failed to realise export proceeds to the tune of Rs 7,450 crore.

"While the total amount of fraud of siphoning of imported duty-free gold and non-payment of loans accrue to around Rs 10,122 crore (Rs 7,450 crore plus Rs 2,672 crore), we suspect the fraud to be above Rs 12,000 crore. We suspect that more funds were siphoned through hawala channels which are still unaccounted for," a DRI official said.

The Enforcement Directorate is also investigating the case. While the CBI probe is based on the complaints by the 25 banks, the ED is probing the case under Foreign Exchange Management Act and Prevention of Money Laundering Act.

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