As the $1.8 billion Punjab National Bank (PNB) saga unfolds, Nirav Modi and Mehul Choksi are two names that are at the forefront of the entire scam. While Nirav Modi is said to have fled the country, Mehul Choksi denied involvement, saying he was falsely implicated.

Choksi claimed that he retired from Diamond R US in 1999 and has had no association or dealing with it since then. Choksi is the maternal uncle of the prime accused Nirav Modi. 

However, it has now come to light that a Bengaluru-based businessman Hari Prasad had filed a complaint against Choksi and his group companies in 2015, after he was allegedly cheated by them. Prasad claims that he filed a criminal complaint with Bengaluru Police in 2015, following which he wrote to several authorities such as Enforcement Directorate (ED), Central Bureau of Investigation (CBI), Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs and eventually the PMO next year.

In the letter, Hari Prasad alleged that Choksi siphoned off thousands of crores out of India. He further alleged that there were deficiencies in its balance sheets. With 31 banks extending loans to Gitanjali Group, Prasad wrote that the company had taken loans to the tune of Rs 9,872 crores with meagre assets of just Rs 25-30 crores, alerting the PMO that this was definitely going to become a non-performing asset (NPA) soon.

Speaking to The News Minute, Hari Prasad says that he detected a huge fraud in the company after he was cheated of nearly Rs 10 crore by Gitanjali Gems. And it’s not just him. At least 20 people and about 50 across the country fell prey to this fraud, he claims.

Edited excerpts of the interview:

How did Mehul Choksi and Gitanjali Gems cheat you?

During 2011-12, Gitanjali Gems ran huge advertisements inviting franchisee investors with the promise of attractive returns on investments. The biggest attraction was that Gitanjali would manage all operations and the franchise owner would get minimum guaranteed returns or profit margins, whichever was higher. And as security, they would give us their jewellery to sell in the shop.

I invested an initial amount of Rs 10 crore and they asked me to set up shop for them. I invested in the shop as well. After this, they promised to give Rs 5.5 lakh to cover the rent of the shop and Rs 10 lakh per month above that. So, I was supposed to get Rs 15-16 lakh every month after my investment.

But they defaulted on all agreements they made, from day one. They never supplied the goods as per the agreement nor paid rent. They dumped old stock with inflated prices and never responded afterwards. I ran behind them for nearly one and half years before shutting shop by end of 2013-14.

When did you first file a complaint?

I filed a criminal complaint with the Bengaluru police in 2015 against Choksi and his group companies. They initially tried to investigate and then reported that there was no criminality involved. I tried to challenge this in court but the case has been dragging on since then, over loopholes and some technicalities.

The case was transferred to CID Bengaluru, which initially took some interest. But that also went into cold storage for reasons I don’t know.

And then you wrote to higher authorities?

I wrote to all agencies concerned (ED, CBI, SEBI) in early 2016 to look into the matter seriously because there is a fraud, but nobody took any action. So, then I finally wrote to the Prime Minister’s Office (PMO).

Did the PMO take any action?

I received an acknowledgement letter from the PMO. It won’t take action on everything we write, I understand that. They forwarded it to Registrar of Companies (RoC) to look into the matter. It’s the duty of ROC to look into details or contact me and ask me more questions to understand why I’m making these allegations. But nobody did anything. I can’t blame PMO, it did its job of forwarding the complaint. PM can’t get involved in everything. A system has been created and it has to get involved. But the system is not good enough.

Did you hear from RoC? Was any action taken?

No. I received an email from ROC on July 18, 2016 stating that my grievance has been ‘disposed of’. I don’t know what ‘disposed of’ meant, but no action was taken.

I tried to connect with them after that but no one responded. I thought this is probably how Indian systems work or maybe they are compromised somewhere, because I remember Choksi himself telling me that they know how to manage these things.

Did you also write to the media? If so, did you get a response?

I wrote to TV18 and many other agencies. But nobody took note. In fact, TV9 Kannada and TV9 Gujarat came and took my interview. They even took interviews from other victims of the fraud. These interviews were never published.  

What is your sense of the large-scale PNB scam involving Rs 11,000 crores? BJP claims that this scam happened when Congress was in power

I can’t give an opinion on this because I don’t understand politics. It’s a fact that they have cheated, but under whose nose?

I don’t think political parties are involved in the cheating.  It’s a businessman who, with the help of some bank officials, has cheated the country.