On the Choksi Trail stirring a Hornet’s Nest!

Development News Exclusive  I  By  Bibhuti Pati

Chicanery Choksi’s collusions Chide and Challenge to Indian Intelligence Agencies

Chubby “Choksi” collusion is now a collywobbles for Indian Intelligence Agencies (IIA). IIA’s clay-brained investigation on chicanery Choksi is only a claptrap and chirp. Choksi is the chieftain of cheating and Choksi’s canniness are not confined with on chattel. Choksi has involved with many more caucus’ cahoots. Choksi’s cession is only chancy and Choksi’s brother and son all are certitude careerists. Choksi—this chide characters know it very well that IIA will never search their casino. IIA’s inquiry against Choksi will be never catalyzed and IIA’s investigation on Choksi is only like a chirrup.

Dark is the world of money laundering and darker the minds of the launderers. Al Capone did it through Laundromats and Nirav Modi and Mehul Choksi through diamonds. But the lesser known facts to Indian media so far and investigative agencies is the fact that Mehul Choksi’s Brother Chetan Choksi probably “assisted” him in this scam. Chetan Choksi is also a promoter of the Gitanjali Gems Group and has on several occasions represented Gitanjali. Chetan Choksi’s reputation precedes him, as the case of bank fraud brought against him by ICICI Bank UK is to the tune of 25 Million US$.

To describe money laundering briefly, there has been a concerted effort by the United Nations, FATF, OECD, UNODC and other international organizations to counter money laundering as it stifles fund flows for several illicit or nefarious activities and terrorist financing activities. Money laundering is covered under the Prevention of Money Laundering Act 2005 in India which is implemented by the Enforcement Directorate (ED) in India. Money Laundering comprises of three stages namely Placement, Layering and Integration. There are several predicate offences to Money Laundering such as fraud, bribery, corruption, illegal transplantation of organs, wildlife trafficking, human trafficking, arms smuggling, terrorist financing, and narcotics. The offence of money laundering is committed when any “proceeds of crime” or tainted money is being projected as clean money and integrated into the banking system and the economy. Section 120B of the Indian Penal Code which deals with criminal conspiracy is also a predicate offence for money laundering and “assisting” or “facilitating” or “conduct thereof” could also be interpreted by courts as aiding or abetting the cause of money laundering.

Chetan Choksi is a diamantaire from Belgium with Indian roots and businesses spread across Belgium, Japan and Hong Kong. Chetan Choksi is ably “assisted” by his son Kavan Choksi who holds a Belgian Passport and looks after business affairs of his father.

Chetan Choksi has had a similar reputation of defrauding creditors in UK, Belgium and probably other jurisdictions through his offshore entities Digico Holdings Limited, Jewel Source Japan Holdings Ltd, Diminico NV, Aurora Creations Ltd. , Fountain Creations Ltd., and other offshore entities/trusts domiciled in Belgium,Turks and Caicos Islands, Seychelles, Japan and bank accounts in more obscure jurisdictions and known tax havens.  The problem for the investigative agencies here would be the complex structure of the several offshore jurisdictions involved in the operations in the scenario.

The third party remittance system provided by trustee companies in offshore jurisdictions acting in fiduciary capacity has been rampantly used in this case for diversion and movement of funds, thereby concealing the true nature or the criminal nature of the funds.

The modus operandi of the Choksi’s has been similar in all jurisdictions. Once the capital has been approved by the banks and passed on to the Choksi’s it takes flight into another jurisdiction via offshore entities and the entity’s bank accounts and thus the trail of money is camouflaged with the deliberate intention of “layering”.

As it is common knowledge that the diamond industry and business is mostly a family run business and most of the important positions in incorporated companies are also kept within the family to have a better grip on affairs of the trade, it would do the prove agency some good to look into all aspects of the case where Indian creditors money could have taken flight to pursue other ventures.

Interestingly, Kavan Choksi also appears in the ICIJ offshore leaks database as the Beneficial Owner of Seychelles incorporated entities. Kavan Choksi, a graduate of London School of Economics serves on the Board of Verite Co. Ltd. which is a listed entity on the Tokyo Stock Exchange.

It is noteworthy that there are two important places in the world of diamond cutting and polishing i.e., Surat (India) and Antwerp (Belgium).

There is no known source predicting that Chetan Choksi and his affiliates have procured diamonds independently, thereby suggesting that Mehul Choksi’s Gitanjali Jems and Jewels could very much be the source for Chetan and Kavan Choksi’s businesses. If that is the case, then does it preclude Chetan Choksi and his affiliates from the money laundering investigation that multiple Indian agencies have been trying to track down.

It is quite puzzling that government agencies have not yet probed Chetan Choksi, Kavan Choksi in this investigation as there is a clear connection and a mere internet search speaks volumes about the affairs of the Choksi’s. Needless to say that by defrauding the creditors, it has not only deteriorated the condition of one bank, but has affected the economy at several layers as the taxpayers money will now be used to liaise with foreign government agencies in order to probe the Belgian, Hong Kong and other offshore connections to this case.

Kavan Choksi manages his operations through several Corporate service providers and one of them being based out of Hong Kong called Sovereign Trust (HK) Limited. The funds would move from unknown sources into the hands of Kavan Choksi managed entities which were run in a fiduciary capacity by Sovereign from Hong Kong. From the data available on public sources it can be ascertained Chetan Choksi ran into legal trouble with banks in UK & Belgium and thus the business operations had to be moved offshore into Japan. Kavan Choksi has a clean record with banks and once he was at the helm of business affairs, it became pretty much easier for business to run as usual.

The questions the baffles our minds is how could the banks extend credit to the tune of 25 Million US$ to Chetan Choksi, when the business wasn’t worth as much? Was it with a little help from his brother Mehul Choksi? And if so, was there a favor in return?

Where is Mehul Choksi’s money now? Was the credit obtained from Indian banks used for legitimate business purposes only? Did capital take flight out of India to obscure foreign bank accounts? What is the connection between Nirav Modi and Kavan Choksi if any, in this money trail? Were offshore entities or bank accounts incorporated to move the money out of India? Did Chetan Choksi or his affiliates aid or assist Mehul Choksi in his scheme of things? Are Kavan Choksi or Chetan Choksi handling Mehul Choksi’s money?

It is pertinent because these questions are necessary for the Indian investigative agencies to probe the money trail and bring back through necessary legal means to aid the ailing banks. It would not be out of place to mention that the Chetan Choksi and Kavan Choksi most likely reside in Japan now.

After all, if most of the money could be repatriated back to India from foreign jurisdictions it would not only help the government in its efforts of combating money laundering but also send a message across the board to prevent similar instances in the future.

The New Drama

After the fugitive diamantaire Mehul Choksi released a video message denying all charges of defrauding the PNB, the Congress released documents to allege complicity of Prime Minister’s Office (PMO) and the Finance Ministry in the escape of Nirav Modi and Choksi from the country. Now both BJP and Congress have started the political game. Accusing the Modi Government of inaction, the party shared a number of complaints made by different people at various intervals during the last three years against the duo to the PMO and several other agencies, including Securities and Exchange Board of India (SEBI).

Furnishing proof of Modi Government’s alleged involvement in their escape, Congress spokesperson Randeep Singh Surjewala said, “On April 20 this year, after Choksi fled, PM Modi met the Antiguan President in the UK but he didn’t utter a word to send back Choksi. This is not my words; it has been said by the Antiguan President in an interview on July 27. The Indian Government never approached them on this issue.”

According to the Congress, first a complaint on May 7, 2015, was filed to Ministry of Corporate Affairs by one Vaibhav Khuraniya and RM Green Solution Private Limited and copies of it were to PMO, ED and Serious Fraud Investigation Office. The PMO acknowledged the complaint on May 26. On May 3, 2017, Khuraniya also emailed the complaint to SEBI.

Thereafter, a similar complaint was filed to Deputy Commissioner of Police, Mumbai. Then another person named Digvijaysinh Jadeja filed an FIR in Ahmedabad Economic Offences Wing, Gujarat against Choksi and others for defrauding them.

“The matter went to Gujarat High Court, where Government of Gujarat was a party. Jadeja also filed an affidavit on July 20, 2016, specifically pointing out that Mehul Choksi and others owed a debt of Rs 9,872 crore to banks and are likely to escape from India,” Surjewala said sharing copies of the complaints and affidavits.

A complaint dated July 26, 2016, was also filed by one Hariprasad to PMO which has already been placed in public domain earlier, he said. Surjewala pointed out that in a reply to a Parliament question dated July 24, 2018, PMO admitted that the first report of action against Nirav and Choksi was given to the PMO by Finance Department on March 1, 2018. Ironically, Nirav had already escaped on January 1, 2018, followed by Choksi three days later.

The Congress questioned as how the Ministry of External Affairs provided the ‘Clean Chit’ certificate for Mehul Choksi’s citizenship of Antigua in May 2017, as clearance certified that there was ‘no adverse information’ against Choksi. Antigua’s Citizenship Investment Unit (CIU) also states that SEBI gave ‘clean chit certificate’ to Mehul Choksi.

“Were there an active warrant for Choksi at the time his citizenship application was being processed, this information should have already been made available to Interpol, a notification of which would have been readily accessible by the CIU and its due diligence partners. Further, the warrant should have formed a part of the criminal records database in India and therefore declared in the police clearance certificate issued by MEA. It is now clear that Interpol gave clearance to Mehul Choksi, as CBI/ED failed to get a warrant issued against him or provide the requisite evidence to Interpol,” Surjewala said.

Congress alleged that Modi met Antigua and Barbuda Prime Minister Gaston Browne on April 20, 2018 on the sidelines of Commonwealth Heads of Govt Meeting in United Kingdom. It is thus clear that even Modi never raised the issue of Mehul Choksi during that meeting, he said.

“It is intriguing that the Modi Government permitted the Indian passport of Mehul Choksi to remain live until Feb 16, 2018, helping him escape in January 2018,” the Congress alleged.

“All the allegations labelled by the Enforcement Directorate are false and baseless. They have attached my properties illegally without there being any basis of the same,” Choksi said in the video. “The passport authority revoked my passport altogether in view of which I was immobilized. I received an email from the passport office which said that my passport has been suspended due to reasons of security threat to India.

“I sent an email to the regional passport office Mumbai requesting them to revoke the suspension of my passport. However, I did not receive any reply from them. They did not even give me any explanation to why my passport has been suspended,” he added. Choksi is one of the prime accused in the Rs 13,500-crore Punjab National Bank fraud. He was last traced to Antigua, where he has been granted citizenship.

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