India Seeks Help from Other Countries to Investigate Scam-Accused Jeweler

The Indian Income Tax Department (I-T department) is seeking help from countries where absconding jeweler Nirav Modi had assets to book him under the black money law.

The I-T department has written to tax authorities in Jersey, the Bahamas, Cyprus, Singapore, and Mauritius, for details of Modi’s accounts and other assets linked to him. Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, he can face up to seven years in prison for not declaring his foreign assets.

Modi and his jeweler uncle Mehul Choksi, who are wanted for a Rs. 11,400 crore fraud at the Punjab National Bank (PNB), had escaped India before the fraud came to light.

The I-T department found that Modi was using multiple overseas entities to direct funds to Indian companies. They believe that money was being roundtripped, and borrowed money was used to make short-term gains, using shell companies in countries that are tax havens. According to findings of the I-T department, Modi was a beneficiary of a trust called Monte Cristo in Jersey, the Economic Times reported. The parent company, Monte Cristo Ventures Ltd, was incorporated in the Bahamas with UBS AG, Singapore.

Before bringing the black money law into effect, the government had given black money hoarders an option to declare their wealth and face taxes, but both Choksi and Modi did not declare their assets.

Meanwhile, China said on April 9 that Hong Kong can agree to India’s request for arresting Modi, according to PTI.

India’s Minister of State for External Affairs VK Singh told parliament last week that the ministry has “sought the provisional arrest of Nirav Deepak Modi by the government of the Hong Kong Special Administrative Region (HKSAR), the People’s Republic of China.”

In response, Chinese Foreign Ministry spokesperson Geng Shuang said, “If India makes relevant request to the HKSAR, we believe the HKSAR will follow the basic law and relevant laws and under relevant judicial agreements with India with the relevant issue.

“According to the one country two systems and basic law of the HKSAR, under the assistance and authorization of the central government, the HKSAR can make proper arrangement on judicial mutual assistance with other countries.”

The investigation against Modi began in February 2018 after it was found that PNB has potentially lost Rs. 14,000 crore in the scam.