NEWS
03/12/2018 10:23 AM IST | Updated 03/12/2018 10:48 AM IST

Nirav Modi Scam: I-T Dept Found Irregularities In 2017, Didn't Share It With Other Agencies

The tax department found red flags in Modi's financial dealings eight months before news of the PNB scam broke.

Francis Mascarenhas / Reuters
Congress activists burn a cutout of Nirav Modi during a protest in Mumbai.

An Income Tax Department probe had found several financial irregularities in dealings by diamond jewellers Nirav Modi and Mehul Choksi and it had written a report that ran into more than 10,000 pages eight months before the scandal went public, The Indian Express reported on Monday.

The I-T Department finalised the report in June 2017, but didn't share its findings with other departments until news of the Punjab National Bank scam broke in February 2018.

The exclusive report by the Express states that the I-T Department flagged over-valuation of stocks, suspicious payments to relatives, dubious loans and bogus purchases in its tax investigation report.

The report adds that the information of wrongdoing was not even shared with the Regional Economic Intelligence Council, which is a mechanism to share information between law enforcement agencies.

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A senior tax official told The Indian Express that the report was allegedly not shared with other agencies because there is no protocol to do so.

"After the Nirav Modi and Mehul Choksi scam, since July-August 2018, the tax department has been asked to share all investigation appraisal reports with the Financial Intelligence Unit (FIU), which in turn shares these with other agencies for investigation and appropriate action," the official told the newspaper.

Modi and his uncle Choksi are alleged to have cheated Punjab National Bank of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking. Investigative agencies probing the case have said they did this with the help of some bank officials.

The Enforcement Directorate has sought to declare Modi a fugitive, but his lawyer has argued Modi cannot return to India as he fears he will be lynched.

Modi has also told courts through his lawyer that he had no record or data with him about his finances.