On Tuesday, the Enforcement Directorate has attached assets worth over Rs 130 crore of various Hyderabad-based jewelry houses and their promoters in a money-laundering probe linked to alleged financial irregularities done during the 2016 demonetization exercise.
According to the ED, the action has been taken against Musaddilal Gems and Jewels Pvt Ltd, Vaishnavi Bullion Pvt Ltd, and Musaddilal Jewellers Pvt Ltd and undertaken under the Prevention of Money Laundering Act (PMLA). The attached assets include 41 immovable properties, investments made in shares and jewelry, and bullion worth Rs 83.3 crore, seized in raids conducted some years back. The total value of these properties is Rs 130.57 crore, it said.
The ED case is based on an FIR registered by Telangana Police against the jewelry houses, post the demonetization of two high-value banknotes – Rs 500 and Rs 1,000 – by the government in November 2016. As per the ED’s statement, during the probe, it was found that the three jewelry and bullion firms had deposited Rs 111 crore worth of demonetized notes in their bank accounts immediately after the note ban was announced on 8 November 2016.
Further, the ED alleged that “They had raised fake cash receipts and sale invoices showing that around 6,000 fictitious customers visited their showrooms to purchase gold jewelry between 8 pm to midnight on 8.11.2016 immediately after the announcement of demonetization.”
It was further revealed that the companies, run by Kailash Chand Gupta and his sons, fabricated invoices to create fictitious sources of income to justify the large amounts of cash deposits based on the advice of their Chartered Accountant.
“Sarda advised them to raise fabricated invoices below Rs 2 lakh so that there would be no requirement of recording the KYC or PAN of the customers,” the agency alleged.
The CA also contributed demonetized cash for conversion and also received a ‘hefty commission’ for rendering advice, it claimed.