No fraud, bank ‘mismanagement’ responsible for PNB case, Choksi tells ED
Blames bank for filing case without giving him an opportunity to present his version
Diamantaire Mehul Choksi, in his reply to the Enforcement Directorate’s (ED) plea to declare him a fugitive economic offender in the ₹13,500-crore Punjab National Bank (PNB) fraud, blamed the “fiasco” on the “mismanagement of the public sector bank”.
Declaring him a fugitive economic offender will enable the ED to confiscate Choksi’s properties in India and abroad.
The special Prevention of Money Laundering Act (PMLA) court will hold the next hearing next month.
“I never wanted to defraud the bank. After a thorough perusal of the case filed by the PNB against the accused and others, it is clear that the letters of undertaking (LoUs) were opened since 2011, which were repaid on the due dates. The entire fiasco is a result of internal mismanagement of PNB,” said Choksi, in a 36-page reply filed through his lawyer Rahul Agrawal on Monday.
According to the charge sheet filed by ED, three of Choksi’s companies – Gitanjali Gems, Gili India Ltd and Nakshatra Brands – fraudulently obtained LoUs worth ₹3,011.39 crore and got the credit limit of foreign letters of credit (FLCs) enhanced to ₹3,086.24 crore.
Choksi is accused to have laundered a total amount of ₹6097.63 crore.
In his reply, Choksi accused the bank of filing the case without giving him any opportunity to put forth his case. “The accounts of the three companies have not been declared as Non-Performing Assets,” ,” the reply states.
“The bank had no reason to file the complaint without giving an opportunity to the accused to repay the amount after utilising his resources,” said Choksi, in his response.
He also denied allegations of defrauding the bank.
“The transaction done with the bank was not with mens rea. Although the allegations are that the accused always wanted to defraud the bank and siphon off the funds outside India, in this case, the accused has left behind assets worth thousands of crores of rupees in India, which clearly shows the intention of the accused was never to run off,” said Choksi’s reply.
The businessman claimed he had made several communications with the bank for settlement of dues, but they were not brought on record by the investigating authorities.
He claimed the case of the Central Bureau of Investigation, the basis of Enforcement Directorate proceedings, is baseless and claimed he had no role to play in the three companies named in the first information reports (FIRs).