A gems and jewellery SEZ owned by fugitive diamond businessman Nirav Modi in Hyderabad has been found to be overvalued in the books of Punjab National Bank (PNB) after officials of Enforcement Directorate (ED), who carried out raids on it on Friday and Saturday, detected huge variation in actual inventory and their book value. The difference is estimated at around Rs 3,500 crore.
A team of ED officials, who flew down from Mumbai on Friday morning to carry out raids, were resisted by the staff of five gems and jewellery units located at a hardware park at Raviryala village in Maheswaram mandal of Ranga Reddy district, about 30 km from the city. However, the ED officials took the help of local police and gained entry and seized the stocks. The Central Bureau of Investigation (CBI) joined the raids on Saturday.
The SEZ on an area of 250 acres was sanctioned by the UPA government and inaugurated by then Chief Minister Y.S. Rajasekhara Reddy in 2005 and then it was named as Rajiv Gems Park, within the hardware park promoted by the combined Andhra Pradesh. However, after 2014, the name was changed to Gitanjali Gems Park which houses all the five firms owned by Nirav Modi and his associates.
Senior officials of PNB from Hyderabad, who assisted the Enforcement Directorate staff during the raids, told The Sunday Guardian on Saturday that the park had five units of the group: Nakshatra World Limited, Nakshatra Brans Limited, Gilli India Limited, Gitanjali India Limited and Bezel Jewellery Private Limited. As the Hyderabad’s PNB has no loan exposure with the firms, the bank officials are unaware of who obtained how much credit.
Interestingly, these five firms in the SEZ were directly extended credit by Punjab National Bank’s Mumbai and Surat branches and the local field staff were never involved in the process.
When the Enforcement Directorate officials forcibly opened around 100 odd boxes and containers at Gitanjali Gems Park, they found that their value could be around Rs 300 crore, but the book value in the group’s computers is mentioned around Rs 3,800 crore.
“The estimate of Rs 300 crore is arrived at only after consulting the managers of the SEZ, but the actual difference between the stock worth and their valuation with the bank would be known only after detailed counting which will take a week or so,” said a manager of PNB’s Hyderabad branch. The zonal officials of PNB Mumbai would be arriving here in a couple of days.
This SEZ is the biggest processing unit of the Nirav group’s gems and jewellery. The group used to import raw and uncut stones from Hong Kong and other places and processed them at Surat, Pune and other places in Gujarat and exported them to UAE, EU and other destinations.
Enforcement Directorate officials were shocked to find only 400 employees at the SEZ as against the 1,850 shown in the records.
These raids are part of investigations by the Enforcement Directorate and the CBI into the mega scam complained by the PNB against Nirav Modi and his associates. The extensive raids at 26 places across the country will continue for a few more days.