Acting swiftly in the probe into the illegal remittances of Rs6,100 crore abroad, the CBI and ED on Tuesday arrested six people, including two senior officials of Bank of Baroda and an executive of HDFC Bank, besides three middlemen.
While the CBI arrested Assistant General Manager SK Garg and head of the foreign exchange division Jainish Dubey posted at Ashok Vihar branch of Bank of Baroda (BoB), the Enforcement Directorate nabbed Kamal Kalra, working with the foreign exchange division of HDFC bank, Chandan Bhatia, Gurucharan Singh Dhawan and Sanjay Aggarwal.
Both Garg and Dubey have been arrested under the provisions of IPC sections relating criminal conspiracy (120-B), 420 (cheating) and for violation of the Prevention of Corruption Act. The ED has arrested the four people under the Prevention of Money laundering Act (PMlA).
A joint team of CBI and ED had on Saturday searched the official and residential premises of Garg and Dubey besides the Ashok Vihar branch of BoB.
In its FIR, the CBI has alleged that “59 current account holders and unknown bank officials conspired to send overseas remittances, mostly to Hong Kong, of foreign exchange worth approximately Rs6,100 crore in illegal and irregular manner in violation of established banking norms under the garb of payments towards suspected non-existent imports.”
These remittances were sent by splitting them into amounts below $1 lakh to avoid automatic detection by software used by banks to alert them about such transactions.
Ashok Vihar branch of the bank was a relatively new one which had obtained permission to entertain forex transactions only in 2013.
During the probe so far, the CBI has unraveled that an estimated Rs6,100 crore was transferred through nearly 8,000 transactions done between July, 2014 and July this year.
All the accused in the PMlA case were alleged middlemen for at least 15 dubious companies, out of the total 59 which were involved in the remittance of the funds through regular banking channels in violation of the norms, ED sources said.
The four people arrested by the ED allegedly connived with each other in “forming” fake companies and business entities in Hong Kong by “over valuing” the exports and subsequently claiming duty drawbacks. Dhawan alone had allegedly availed duty drawback to the tune of Rs15 crore in just six to seven months and was in the process of putting in similar applications before the scam was unraveled.
The HDFC employee was allegedly helping Bhatia and Aggarwal for remitting the amount through BoB against a commission of 30-50 paise per $ transferred abroad, Bhatia was allegedly instrumental in forming the companies in India and used to remit money to companies based at Hong Kong and was working with Dhawan, an exporter of readymade garments, the sources elaborated.
Aggarwal allegedly transferred tainted foreign remittances worth Rs430 crore through the BoB’s Ashok Vihar in a short period.
The agency is likely to arrest more middlemen and bank officials as 44 more firms involved in the dubious transactions are under the scanner.The ED is simultaneously probing suspected violations of the Foreign Exchange Management Act (FEMA).
The BoB has informed the probe agencies that only Rs 343 crore out of the 5,151 crore deposited by the current account holders was deposited in cash and the remaining amount was transferred through other banking channels.