I-T dept diamond valuers caught in Rs 2,000-crore scam

Shiv Kumar
Tribune News Service
Mumbai, July 14,2018

At least three valuers who regularly assisted the Income Tax department in assessing the value of diamonds and other precious stones have turned out to be major kingpins in a diamond import scam estimated to be more than Rs 2,000 crore.

The Department of Revenue Intelligence (DRI) had earlier this week arrested valuers Naresh Mehta, Paresh Shah and Pradip Zaveri for allegedly colluding with diamond importers in valuing rough diamonds imported into India at a fraction of their true value. Also arrested is one Vikki Kakkad, a customs house clearing agent who allegedly colluded with the trio in the scam.

According to sources, the scam came to light after a whistleblower tipped off the DRI about 'low quality' roughs being passed off as superior products.

Acting on the information investigators seized consignments from the Bharat Diamond Bourse (BDB) at the Bandra Kurla Complex (BKC) here following a tip off and intercepted consignments of a declared value of Rs 156 crore. On revaluing, the consignments were found to be worth just Rs 1.2 crore, officials said here.

Investigators suspect that the over-invoicing of imported diamond roughs could be to the tune of Rs 2,000 crore and the difference between the declared and actual values could have been laundered abroad.

Sources say two of the arrested men have accompanied Income Tax officials during raids as spot valuers.

Officials say they are looking to arrest some diamond merchants as well who may have availed of the services of the four. A few shell companies set up by them are also under investigation, according to sources.

According to DRI officials here the four arrested persons and some others are being questioned to help them trace the masterminds behind the scam.

Meanwhile the Gem and Jewellery Export Promotion Council, the apex body of set up by the Ministry of Commerce, has denied reports that the valuers were its members. "It is unfortunate that a group of people who are not members of GJEPC have used gem and jewellery products as a conduit for money laundering," the body said in a statement.

The organisation further claimed that its members had played the role of whistleblowers in exposing underhand practices by exporters who were not registered with it.