PMLA case: ED arrests lady Director of Hong Kong firm

The Enforcement Directorate has arrested a woman Director of a Hong Kong-based firm in connection with its money laundering probe against a diamond firm here, involving Rs 1,478 crore funds and over 500 alleged shell company accounts.
The agency today identified the woman as Kritika Dahal (35) and said she was arrested at the agency's office here on February 25 under the provisions of the Prevention of Money Laundering Act (PMLA).
It said Dahal was first "intercepted" at the airport and was placed under arrest after questioning.
She has been sent to ED's custody till tomorrow by a special PMLA court here.

The agency said Dahal "controlled" a firm called International Rising Limited in Hong Kong and had 99.99 per cent shares of the said company.
The case emerged after the ED booked Ritesh Jain, a diamond trader based here, for "opening bank accounts in the name of dummy companies for affecting illegal transactions" post demonetisation, and subsequently indulged in alleged illegal import of diamonds using a maze of bank accounts and layering.

These dummy or shell firm accounts, the agency said, were used to launder huge monies post demonetisation, which included the involvement of the Hong Kong-based firm.
"During the course of investigation, it was revealed that the accounts were used for effecting illegal transactions of huge amounts which were credited from more than 100 accounts of different shell companies, sourced from more than Rs 92 crore in old demonetised currency deposited in the account post the notes ban.

"Layering of these funds has been done through more than 500 accounts," the ED said in a statement.
The agency had also carried out raids in this case last year in December, including at the premises of Ms Rajeshwar Exports Private Limited, a firm of Jain and had seized diamonds worth over Rs 30 crore.
"The funds from all companies/firms were credited through RTGS to Ms Rajeshwar Exports Pvt Ltd which were utilised for outward remittance to Hong Kong in guise of payment of import of overvalued consignments of total 355 bills of entries. It was found that the total outward remittance of USD 21.22 crore (approx Rs 1,421 crore) were undertaken from the account of the firm within a period of one year.

Giving details about the Hong Kong-based firms' role in
the crime, the ED said it was found that "an amount of Rs 1,478.85 crore was yet to be received by Ms Rajeshwar Exports against export made from the company. Out of this, only one company, International Rising Limited, has received USD 14.79 crore (approx Rs 990 crore) for supply of 220 consignments of diamonds/gold, which appears to have been overvalued for more than 10 times.
The HK firm was controlled by Dahal, who the agency said, admitted during questioning that she became the Director of the frim "on instructions" from Jain.

"The company in Hong Kong was established for the sole purpose of money laundering and had no other activity," the agency added.
The case is one of the prominent ones being probed in the western metropolis for alleged black money routing and generation, post the notes ban and is also being investigated by the Mumbai Police and the Income Tax department.