After tightening the noose around beleaguered liquor baron Vijay Mallya, the Indian authorities have now turned their glare on Jatin Mehta, who is accused of defaulting on loans to the tune of Rs 7,000 crore.
According to an Economic Times report, the Enforcement Directorate (ED) is learnt to have asked Dubai to expedite its response to India’s letter rogatory (LR) relating to Mehta’s Winsome Group – country’s second largest wilful defaulter after Mallya’s Kingfisher Airlines.
Winsome Diamonds and its subsidiaries owe about Rs 7,000 crore to a consortium of 13 public and private banks led by Standard Chartered and the Punjab National Bank.
India had sent LR to the Saudi Arab Emirates around the middle of last year. The UAE, which is yet to respond to the request, had a few months ago shared some information with India’s Financial Intelligence Unit (FIU).
“The information received by FIU was more on an informal basis. It was not very significant. We would like Dubai to officially respond to LR. Due to the nature of Winsome transactions and lenders’ allegations, we need Dubai’s cooperation to make any progress. It won’t be easy as Jatin Mehta has taken citizenship of St Kitts, which has no extradition treaty with India,” Economic Times quoted a source as saying.
Last week, it was reported that the government has lodged an FIR against Mehta, who has been untraceable since 2012. He is being probed both by the ED and CBI.
In May last year, the Enforcement Directorate had attached assets worth more than Rs 170 crore of the diamond firm in connection with its money laundering probe.
The orders for the seizure of both movable and immovable properties of the firm were under the provisions of the Prevention of Money Laundering Act (PMLA).
The troubles started in January 2013, when 13 of its UAE-based distributors controlled by a Jordanian national failed to pay Rs 4,760 crore to the company, according to its 2012-13 annual report. Following this, four foreign banks led by Standard Chartered, encashed the bank guarantees worth Rs 4,000 crore.
As the troubles mounted and the company failed to service its debt, many banks got the company and promoter Mehta declared 'wilful defaulters' as forensic audits showed the firm had allegedly siphoned off funds.
The case, like that of the Rs 9,000 crore bank loan default by Mallya, is being monitored at the top level including the Finance Ministry and the Prime Minister's Office (PMO).
