A special CBI court today remanded Hasmukh Shah, a former director and authorised signatory of the Forever Precious Jewellery and Diamonds Ltd (FPJDL), also known as Winsome diamonds group, to the agency's custody till March 26.
The group has allegedly defaulted on loans worth thousands of crores.
The CBI told the court that the FPJDL was engaged in production facilities for cutting and polishing of diamonds and for manufacture of plain and studded gold jewellery.
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Shah, believed to be the man Friday of Jatin Mehta, an absconding accused in the case, was arrested here yesterday.
The FPJDL borrowed from a consortium of various banks led by the Punjab National Bank (PNB), it told the court.
Canara Bank, one of the members of the consortium, is the complainant in the case.
In March 2012, the Management Committee of Canara Bank sanctioned over Rs 160 crore of fund-based and non-fund based limit to the FPJDL, the agency said in its remand application.
Out of the sanctioned non-fund based limit, the company opened various Standby Letters of Credit (SBLC) in favour of various bullion banks, it stated.
The company purchased gold from these bullion banks abroad - The Bank of Nova Scotia, Standard Bank and Standard Charted Bank - against these SBLCs.
Later, this gold was processed and sent to 13 buyers in the UAE, the CBI stated.
The company also failed to make the payment for the gold imported on the strength of SBLC, the agency said.
"In this regard, the company has taken plea that export proceeds have not been received from foreign buyers (which) resulted in invoking the SBLCs by bullion banks that cost wrongful loss of Rs 146.35 crore to Canara Bank.
"Hasmukh Shah was a very close confidante of Jatin Mehta, promoter and guarantor of Forever Precious Jewellery and Diamond. Shah is a former director of the company and also one of the authorised signatories," the agency stated.
As per the CBI, Shah instructed and forced other employees of the FPJDL for becoming authorised signatories and signed documents related to the opening of SBLCs.
He obtained the signatures on various documents to be submitted before banks for availing credit facilities and subsequently co-ordinated with them, it said.
The agency stated that Shah was coordinating all exports being done from Chennai and Cochin units of the company and was giving directions to the unit heads concerned.
"The CBI had registered 11 cases against Winsome Diamonds and there is a total financial loss of Rs 4625.43 crore," said special CBI prosecutor Limosine A.
He said custodial interrogation of Shah was necessary to understand his modus operandi and to locate relevant documents.
The lawyer said they wanted to understand the overseas transactions happened in Dubai, Singapore, Hong Kong, as Shah had visited these places.
"On the basis of investigation conducted so far, there is a strong reason to believe that Shah has information about the funds siphoned off by Mehta," said Limosine.
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