SFIO, that probes big financial frauds, will look into all the aspects related to the alleged fraud
The Serious Fraud Investigation Office (SFIO) on Monday began an investigation into the affairs of the companies belonging to the billionaire jewellery designer Nirav Modi, his relatives and maternal uncle Mehul Choksi, all of them accused of defrauding the Punjab National Bank of Rs 11,400 crore.
"The probe has been ordered by the corporate affairs ministry under section 212 of the Companies Act in 'public interest'. The agency has been asked to complete its investigations in 4 months," sources said.
SFIO, that probes big financial frauds, will look into all the aspects related to the alleged fraud. It will also investigate if a web of companies was created to launder money from the loan accounts of the accused. "We will ask for the documents from other agencies like Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) that are already probing the matter. This may take some time as these agencies are still procuring documents," said a source.
"Once the documents are analysed, Nirav Modi, Mehul Choski and other accused would be called for questioning," the source said. There is a suspicion that the accused have diverted the money from their loan accounts to the other companies.
"About 110 companies are believed to have been related to the accused. These could even be more in number. It is likely that shell companies have been used for laundering money" said the source.
The SFIO will also investigate if the companies flouted subsidiary norms. As per the norms, a company can't have more than two layers of subsidiaries.
Gitanjali Gems, Gili India, Nakshatra, Stellar Diamonds, Solar Exports and Diamonds R US, belonging to Modis and Choksy, are already being investigated by the Central Bureau of Investigation and Enforcement Directorate for the alleged fraud.
The companies can be asked to wind up if found violating the provisions of the Companies Act, while the person guilty of fraud can get a maximum of 10 years of imprisonment.
SFIO will lodge cases in the court against the accused once the investigations are complete. Companies Act 2013 has brought stringent punishments for the companies and their directors.
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