Six months after it received a complaint from Oriental Bank of Commerce (OBC) and days after Nirav Modi episode unravelled, the CBI has registered a case against another diamond jewellery exporter based in Delhi for a suspected bank loan fraud to the tune of Rs 389.85 crore.
The latest FIR comes close on the heels of the case against diamantaire Nirav and his uncle Mehul Choksi in a Rs 11,394.02 crore bank fraud towards Punjab National Bank. The bank approached CBI in August last year after their efforts to locate the Directors of Dwarka Das Seth International Pvt Ltd (DDSIPL) for ten months did not yield any result.
Besides the company, Directors Sabhya Seth, Reeta Seth, Krishna Kumar Singh, Ravi Singh and another company Dwarka Das Seth SEZ Incorporation are named in the FIR. Seth and others believed to have fled the country and CBI has initiated efforts to locate the accused as they were not available at the address they provided to the bank.
The loans had been declared non-performing assets (NPAs) on March 31, 2014 and the bank was holding discussions with Seth on the repayment schedule. According to the bank, the company had availed various credit facilities between 2007-12, which swelled to Rs 389.85 core crore during the period.
The bank claimed that modus operandi appeared to be that the company was using Letters of Credit (LoCs) to pay off other creditors against the purchase of gold and other precious stone and transfer gold and funds outside the country using fictitious transactions.
The OBC found that the company was dealing with Dubai Bank Kenya, Soeil Chartered Bank, Trade Chartered Bank, TF Bank Kontrackt Inc and Century Bank Corp LLC, which were "poorly rated" and stopped discounting any bills.
In its complaint, the OBC said, "Seth had orchestrated an elaborate plan for duping the bank." It claimed Trade Chartered Bank is an "equal partner" in crime as it had established that Letters of Credit were initiated without the request of the opener as alleged by one of the buyers Dubai-based Al Salam Jewellery.
At least three entities mentioned by Seth potentially could be "non-existent" and a way for the borrowers to funnel funds from the country, the bank claimed. One of the Letters of Credit was issued by a "non-existent" bank, if one goes by the address given in the invoice.