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Probe into PNB scam starts in full swing; 200 shell firms under scanner

The CBI is examining the balance sheets of 18 India-based subsidiaries of the Gitanjali group of firms, promoted by Mehul Choksi, to get a grip on the trail of funds the group took from banks on the basis of guarantees furnished by Punjab National Bank (PNB). The agency on Sunday evening did searches at the Brady Road branch of PNB in Mumbai, and the operation is likely to continue till morning. CBI officials said the agency was questioning Gokulnath Shetty, a retired PNB official; Manoj Kharat, a serving one; and a signatory of a company run by Nirav Modi, the co-accused, apart from other officials of PNB. They said the agency was analysing the records recovered from a server seized during searches after registering the FIR against Choksi. When asked about a possible quid pro quo involved in the alleged scam perpetrated in collusion with billionaire diamond merchants Choksi and his nephew Modi and Punjab National Bank officials, they said they were looking into it. “The focus is to understand the depth of the scam, the movement of funds and the role of other senior officials,” an official said.200 shell firms under scanner of agencies At least 200 shell firms and “benami” assets have come under the scanner of investigative agencies. The Enforcement Directorate (ED), which continued its searches on the premises of Modi and Choksi for the fourth day on Sunday, is moving to attach at least 24 immovable properties under the Prevention of Money Laundering Act (PMLA). The ED on Sunday raided at least 45 premises, including jewellery showrooms and workshops, in the country. It seized diamond jewellery worth around Rs 10 million from an outlet in Patna. ALSO READ: PNB scam: Odisha to review Gitanjali group’s Rs 6-bn jewellery park project “As many as 29 properties — of Modi, his family members, and companies — that have been provisionally attached by the Income Tax department are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said. CVC meeting with PNB, FinMin The Central Vigilance Commission will meet the PNB management and finance ministry officials on Monday in connection with the fraud.

While PNB officials are saying the management keeps meeting the CVC regularly, this one is important owing to the fraud.

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Sleuths scan shell firms

New Delhi: At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies that are probing the Rs 11,400-crore alleged fraud at Punjab National Bank, involving diamond czar Nirav Modi, his relative and business partner Mehul Choksi and others.

The Enforcement Directorate (ED), which continued its searches against Modi, Choksi and their companies for the fourth day on Sunday and seized diamonds and gold worth Rs 20 crore, is also moving to attach at least two dozen immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED on Sunday raided at least 45 premises, including jewellery showrooms and workshops

“As many as 29 properties – of Modi, his family members and companies – that have been provisionally attached by the income tax department, are being assessed by the ED under PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said.

He added that the ED and the I-T department had zeroed in on about 200 dummy or shell companies in the country and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create benami assets in the form of land, gold and precious stones, which is now being probed by the tax department. Both the ED and the IT department have formed special teams to investigate the case, sources said.

The ED has seized diamonds, gold jewellery and other precious stones worth Rs 5,694 crore till now. PTI

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PNB fraud: Shell firms, benami assets on the radar amid fresh raids on Nirav Modi, Choksi

A file photo of billionaire jewellery designer Nirav Modi. Photo: Aniruddha Chowdhury/Mint

A file photo of billionaire jewellery designer Nirav Modi. Photo: Aniruddha Chowdhury/Mint

Law enforcement agencies on Sunday said they were scrutinizing 200 shell companies and benami assets as they raided dozens more properties belonging to absconding jeweller Nirav Modi and his uncle and business partner Mehul Choksi, named in the Rs11,400 crore fraud at Punjab National Bank (PNB).

The Enforcement Directorate (ED) conducted searches across 45 locations in India as the crackdown against chief suspect Modi continued for the fourth straight day.

A notice reviewed by Mint showed the agency was conducting searches at properties in cities across India—including in Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Kolkata, Lucknow, Mumbai and Patna.

The ED on Saturday conducted searches across 21 locations at premises belonging to Modi and Gitanjali Gems managing director Choksi, bringing the total value of the seizures to Rs5,674 crore.

Press Trust of India on Sunday cited an unnamed senior ED official as saying that the investigating agency and the income-tax department have zeroed in on 200 shell companies—both in India and overseas—that were being used to receive funds as part of the alleged fraud, in order to create benami assets in the form of land, gold and precious stones.

A day after the ministry of external affairs suspended the passports of Modi and Choksi on Thursday, the ED issued summons against the two men asking them to appear for questioning in Mumbai on 23 February.

As many as 29 properties belonging to Modi, his family members and companies that were provisionally attached by the income-tax department on Friday are also being assessed by the ED under the Prevention of Money Laundering Act, 2002.

“As the probe widens and more searches are conducted, more assets belonging to the accused will be attached under the money laundering act,” an official familiar with the developments said on condition of anonymity.

On Saturday, the Central Bureau of Investigation (CBI) arrested Gokulnath Shetty, a former deputy manager at PNB, Manoj Kharat, a single-window operator at the public sector bank, and Hemant Bhat, who was the authorized signatory of the Nirav Modi group.

A special CBI court in Mumbai later sent all three to police custody until 3 March.

Other than Shetty, Kharat and Bhat, CBI is also investigating the roles of three other PNB employees: Bechu B. Tiwari, a former chief manager at the state-owned bank’s Nariman Point branch in Mumbai; Sanjay Kumar Prasad, deputy general manager; and Mohinder Kumar Sharma, chief manager of the zonal audit office.

In its most recent complaint to CBI on 13 February, PNB, highlighting the involvement of some of its officials, said, “They have fraudulently issued letters of undertaking (LoUs), without following the bank’s prescribed procedures… and without making entries in the banking system, avoiding detection of the transactions… transmitted SWIFT instructions to the overseas branches of Indian banks under buyer’s credit.”

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Leaders of congressional tax-writing committees commit to fixing Section 199A of new tax law

The National Grain and Feed Association (NGFA) commended the leaders of the Senate Finance and House Ways and Means Committees for their statements committing to addressing as soon as possible the unintended consequences of Section 199A of the Tax Cuts and Jobs Act during hearings on Capitol Hill this week.

During a Senate Finance Committee hearing on Feb. 14, Chairman Orrin Hatch, R-Utah, noted that the provision’s current language “does not maintain the previous competitive balance between cooperatives, other agricultural businesses, and the farmers who sell their crops to them, which existed prior to enactment of the tax reform bill.”

The new Section 199A – included during the waning hours of congressional consideration of the Tax Cuts and Jobs Act of 2017 – is influencing producer marketing decisions. As currently written, Section 199A language could significantly skew producers’ decisions on which type of business entity with which to market their commodities. The provision unintentionally created a tax advantage for producers who sell to cooperatives instead of private and independent firms.

Hatch said he is committed to working with fellow leaders on the committee, Sens. Chuck Grassley, R-Iowa; Pat Roberts, R-Kan., and John Thune, R-S.D., and House Ways and Means Chairman Kevin Brady, R-Texas, “to develop a solution to this issue that does not choose winners and losers and is fair to everyone involved.

“Once a suitable solution is identified, my goal is to work with my colleagues to advance legislation that can be sent to the president for his signature as soon as possible,” Hatch noted.

During the same hearing, Grassley also commented on the “necessity for correcting” Section 199A. “It is pretty simple that Congress would not pass a law that would put some segments of our economy out of business and that’s why it needs to be changed,” he said.

In the House Ways and Means Committee hearing on Feb. 15, Chairman Brady echoed those sentiments. “We know that certain parts of this provision have unintended consequences,” he said, noting that he’s committed to developing “the right solution now – one that’s thoughtful, carefully crafted, and effective in restoring balanced competition in the marketplace.”

Brady said he is “committed to taking action on a solution as soon as possible.”

NGFA President Randy Gordon noted in a media statement that the Association is disappointed that a solution to correct Section 199A has not already been passed by Congress. However, “considerable progress has been made during the last several weeks of intensive effort toward reaching an equitable solution,” Gordon said, adding that NGFA is “gratified that the many members of Congress with whom we and other stakeholders are engaged on this issue are equally committed to enacting an equitable solution as part of the next available legislative vehicle.”

The NGFA notes that the two fundamental goals of these efforts remain to replicate the tax treatment accorded to cooperatives and their farmer-patrons under previous Section 199 of the tax code, and to do so in a way that restores the competitive landscape of the marketplace that existed prior to the enactment of Section 199A on Dec. 22, 2017.

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In boost to reform, Saudi Arabia’s cabinet approves bankruptcy law

DUBAI/KHOBAR, Saudi Arabia (Reuters) – Saudi Arabia’s cabinet has approved a bankruptcy law, sources familiar with the matter said on Sunday, giving a boost to efforts to make the kingdom more enticing to investors.

Modern bankruptcy legislation does not currently exist in Saudi Arabia, creating difficulties for struggling companies seeking to restructure debt with creditors since the 2009 global financial crisis and, more recently, the dip in oil prices.

The kingdom is embarking on an intensive drive to overhaul its economy – including updating outdated laws – as it seeks to create an investor-friendly climate to push through a multi-billion dollar pipeline of asset sales such as the initial public offering of Saudi Aramco, expected to be the world’s largest public share sale.

“The timing is excellent,” said Bader al-Busaies, managing partner at Al Suwaiket and Al Busaies law firm.

“Lots of companies are facing financial difficulties. Before it was either liquidation or stakeholders had to inject money. The new law is an alternative solution – the international practice has proven that insolvency law offers a good solution for companies.”

King Salman endorsed the bankruptcy law after the cabinet approved it, the sources said, citing a document dated last week.

The Ministry of Commerce and Investment did not immediately respond to a request for comment, and it was not clear when the law would be promulgated and take effect.

Saudi Arabia’s Shura Council, a top advisory body to the government, in December approved a draft of the law which consisted of 231 articles in 17 chapters. It regulated bankruptcy procedures such as settlements and liquidation, for individuals as well as local and foreign companies, according to a government statement at the time.

No details of the framework of the law have yet been released but an earlier draft version created a provision whereby approval of a debt restructuring deal could be achieved if at least two-thirds of creditors approved the plan.

That might help to resolve existing distressed debt disputes such as one faced by Ahmad Hamad Algosaibi and Brothers (AHAB), a local conglomerate which currently has two-thirds of creditors’ support for its debt proposal.

AHAB and another company, Saad Group, defaulted in 2009 in Saudi Arabia’s biggest financial meltdown, leaving international and regional banks and other creditors owed about $22 billion.

Editing by Andrew Torchia and Adrian Croft

Our Standards:The Thomson Reuters Trust Principles.

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PNB fraud: 200 shell firms, benami assets under ED, Income Tax dept scanner

New Delhi: At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies that are probing the Rs 11,400-crore alleged fraud at the Punjab National Bank (PNB), involving diamond czar Nirav Modi, his relative and business partner Mehul Choksi and others.

The Enforcement Directorate (ED), which continued its searches against Modi, Choksi and their companies for the fourth day on Sunday, is also moving to attach at least two dozen immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED on Sunday raided at least 45 premises, including jewellery showrooms and workshops, across the country. “As many as 29 properties — of Modi, his family members and companies — that have been provisionally attached by the Income Tax department, are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said. He added that the ED and the I-T department had zeroed in on about 200 dummy or shell companies in the country and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create “benami” assets in the form of land, gold and precious stones, which is now being probed by the tax department. Both the ED and the IT department had formed special teams to investigate the case, sources said.

The ED has seized diamonds, gold jewellery and other precious stones worth Rs 5,674 crore till now in the case.

The I-T department on Saturday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them. It had also attached 29 properties and 105 bank accounts of Modi, his family members and firms owned by them.

Modi, Choksi and others are being investigated by multiple probe agencies after it recently came to light, following a complaint by the PNB, that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank. The CBI is also looking into the matter.

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PNB fraud: 200 shell firms, benami assets under ED, IT dept scanner

By: PTI | New Delhi |
Updated: February 18, 2018 8:58 pm


PNB fraud: Agencies suspect shell firms; Nirav Modi exec, bank officials held. The Punjab National Bank (PNB) branch where fraudulent transactions were detected. (Express Photo: Ganesh Shirsekar)

At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies that are probing the Rs 11,400-crore alleged fraud at the Punjab National Bank (PNB), involving diamond czar Nirav Modi, his relative and business partner Mehul Choksi and others.

The Enforcement Directorate (ED), which continued its searches against Modi, Choksi and their companies for the fourth day today and seized diamonds and gold worth Rs 20 crore, is also moving to attach at least two dozen immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED today raided at least 45 premises, including jewellery showrooms and workshops, across the country.

“As many as 29 properties — of Modi, his family members and companies — that have been provisionally attached by the Income Tax department, are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said.

He added that the ED and the I-T department had zeroed in on about 200 dummy or shell companies in the country and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create benami assets in the form of land, gold and precious stones, which is now being probed by the tax department. Both the ED and the IT department had formed special teams to investigate the case, sources said.

The ED has seized diamonds, gold jewellery and other precious stones worth Rs 5,694 crore till now in the case. The I-T department yesterday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them. It had also attached 29 properties and 105 bank accounts of Modi, his family members and firms owned by them.

Modi, Choksi and others are being investigated by multiple probe agencies after it recently came to light, following a complaint by the PNB, that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank. The CBI is also looking into the matter.

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Meet a representative from university of law, uk in your city

The University of Law is one of the UK’s longest-established specialist providers of legal education. We can trace our origins to 1876 with the formation of leading tutorial firm Gibson & Weldon. With a rich heritage and a reputation for innovation and contemporary teaching practices, we continuously focus on developing the best legal minds. The University of Law has been given a Gold award for Teaching Excellence – the highest possible rating by UK Government.

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PNB fraud: 200 shell firms, benami assets under scanner

At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies that are probing the Rs 11,400-crore alleged fraud at the Punjab National Bank (PNB), involving diamond czar Nirav Modi, his relative and business partner Mehul Choksi and others.

The Enforcement Directorate (ED), which continued its searches against Nirav, Choksi and their companies for the fourth day on Sunday, is also moving to attach at least two dozen immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED on Sunday raided at least 45 premises, including jewellery showrooms and workshops, across the country.

“As many as 29 properties – of Modi, his family members and companies – that have been provisionally attached by the Income Tax department, are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said.

He added that the ED and the I-T department had zeroed in on about 200 dummy or shell companies in the country and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create “benami” assets in the form of land, gold and precious stones, which is now being probed by the tax department.

Both the ED and the IT department had formed special teams to investigate the case, sources said.

The ED has seized diamonds, gold jewellery and other precious stones worth Rs 5,674 crore till now in the case.

The I-T department on Saturday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them.

It had also attached 29 properties and 105 bank accounts of Nirav, his family members and firms owned by them.

Nirav, Choksi and others are being investigated by multiple probe agencies after it recently came to light, following a complaint by the PNB, that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank.

The CBI is also looking into the matter.

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PNB fraud: 200 shell firms, benami assets under ED, I-T dept scanner

NEW DELHI: At least 200 shell firms and “benami” assets have come under the scanner of the investigative agencies that are probing the Rs 11,400-crore alleged fraud at the Punjab National Bank (PNB), involving diamond czar Nirav Modi, his relative and business partner Mehul Choksi and others.

The Enforcement Directorate (ED), which continued its searches against Modi, Choksi and their companies for the fourth day on Sunday, is also moving to attach at least two dozen immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED today raided at least 45 premises, including jewellery showrooms and workshops, across the country.

“As many as 29 properties — of Modi, his family members and companies — that have been provisionally attached by the Income Tax department, are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said.

He added that the ED and the I-T department had zeroed in on about 200 dummy or shell companies in the country and abroad that were being used to route or receive funds as part of the alleged fraud.

It is suspected that the shell firms were being used by the accused to launder money and create “benami” assets in the form of land, gold and precious stones, which is now being probed by the tax department.

Both the ED and the I-T department had formed special teams to investigate the case, sources said.

The ED has seized diamonds, gold jewellery and other precious stones worth Rs 5,674 crore till now in the case.

The I-T department yesterday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them.

It had also attached 29 properties and 105 bank accounts of Modi, his family members and firms owned by them.

Modi, Choksi and others are being investigated by multiple probe agencies after the fraud recently came to light, following a complaint by the PNB, that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank.

The CBI is also looking into the matter.

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