The Enforcement Directorate (ED) will soon write to the West Asian countries and Hong Kong in order to obtain the details of illegal payments made overseas in connection with the Rs 700 crore Surat diamond Hawala case.
The ED has tracked the trail of money to some specific locations and banking channels in Dubai, United Arab Emirates (UAE), Hong Kong and China in connection with the high-profile case that was unearthed by the agency in the popular diamond town of Gujarat.
“letters Rogatory (judicial requests) will be sent to a few countries in the West Asia to get the exact details of the illegal transactions. A competent court will soon be approached seeking permission in this regard,” an official privy to the development said.
“The agency has detected some funds, which have been sent through illegal banking channels to Hong Kong and China and legal replies from these countries would be obtained to take the probe further,” said an official.
The agency is also probing the role of a large private bank, located in Surat and Mumbai, as large amounts of international payments were detected as being dispatched from its portals without proper Know Your Customer (KYC) checks.
The Central probe agency has, however, brought businessman Afroz Fatta under its scanner. The ED is probing his role under money laundering laws in this case. It is also probing the Hawala dealings (transfer of money through illegal banking channels) in this particular case under the provisions of the Foreign Exchange Management Act (FEMA).
The agency’s zonal office in Surat, in March, had claimed to have busted a Hawala racket to the tune of Rs 700 crore during searches at the offices of some diamond traders in this city.
Sleuths also questioned Fatta and another trader Madanlal Jain for their alleged involvement in the racket where it is suspected that Rs 700 crore was sent outside India.
ED suspects that the people it is probing indulged in huge under-valuation of imported diamonds in order to send a large amount of foreign exchange outside the country without paying proper duties and taxes.
The agency has alleged that instead of importing diamonds, the traders, among others, made bogus import bills claiming that they had purchased the diamonds from a foreign trader.Using the bills, they said, the traders used to transfer money to overseas banks and financial intermediaries, without ever importing any diamond.