ED raids HM Diwan Jewellers
New Delhi: In a city-wide operation, the Enforcement Directorate conducted search and survey operations at a Park Street showroom of HM Diwan Jewellers in Kolkata and at the residences of Vijay Diwan, the beneficial owner of the company, in connection with the money-laundering case against controversial IRS officer Neeraj Singh.
Officials with direct knowledge of the matter said that HM Diwan Jewellers was being investigated by the financial probe agency for various dubious transactions with relatives of Neeraj Singh and the raids have now revealed that the jewellery company was allegedly parking funds on behalf of a number of senior civil servants and bureaucrats, including a 1991-batch IRS officer, who is currently posted as a Commissioner of Income Tax in one of the Appeals divisions.
According to a highly placed source, Vijay Diwan was in regular contact with this '91-batch IRS officer and their conversation records show that he might be one of the public officials using the jewellery outfit to launder alleged ill-gotten wealth.
As per documents available with the ED, HM Diwan had paid Rs 50 lakh into the account of Singh's mother-in-law, showed as a legitimate purchase of gold and jewellery, when the jeweller was being probed by I-T for raising bogus capital gains and running shell companies. The I-T probe was however quietly snubbed when Singh was Additional Director I-T (Investigation) in the city.
An official here said that suspicion arose when it was found that the payment was made more than 15 days before the purchase transaction was shown on paper. He added that HM Diwan Jewellers' opening stock on that day was lowest on paper, showing an intention to make large cash sales and then adjust it in the books later.
The Rs 50 lakh was then routed through various shell companies to purchase a property in Navi Mumbai under the name of Manish Rajeshwar Singh, Neeraj Singh's cousin. Documents relating to how this money was laundered were also discovered at the premises of Kolkata-based accountant Govind Agarwal, who was allegedly acting as a frontman for several of these senior civil servants, including Singh.
In fact, the ED is also in possession of documents that show several gold and jewellery purchases from HM Diwan Jewellers by Tobu Engineering, one of the 98 shell companies allegedly run and operated by Agarwal. Sources said that HM Diwan has also invested large stakes in a prime rela estate company in Kolkata.
With the raids underway till Wednesday night, the ED has also examined one Deval Tibrewala in connection with the Rs 15,000 crore Rose Valley chit fund case, Singh's involvement in which is also being probed. Neeraj Singh has already been interrogated by the ED in the case, where he denied all allegations against him, whereas Agarwal has so far confirmed Singh's connection to Rose Valley promoter Gautam Kundu.
Sources in the know said that Tibrewala had sold Chocolate Group of Hotels to the Rose Valley Group for Rs 110 crore, when in fact the balance sheet value of the group at the time was less the Rs 15 crore. The group company is currently owned by Biva Kundu, Rose Valley promoter Gautam Kundu's mother.
As the ED's probe in the Neeraj Singh-Govind Agarwal nexus expands, one official said, "It seems that Agarwal was using a web of shell companies to park funds and launder alleged ill-gotten wealth on behalf of several high-ranking public officials. There is much more to be unearthed in the coming months."
In fact, according to documentary evidence found at multiple searches at premises of Agarwal, Singh and other alleged co-conspirators, the list of public officials involved in the money-laundering racket included the likes of a former I-T chief and Chief Vigilance Commissioner and even a Chief Commissioner of I-T posted in the Eastern region of the country.
It remains to be seen whether these public officials will be criticially examined in the course of ED's investigation.
