Fugitive diamond merchant Nirav Modi's close confidante and qualified charted accountant Shyam Wadhwa has admitted that he assisted Nirav Modi in forming shell companies to launder money.
A source in the Enforcement Directorate confirmed to India Today that Wadhwa, who was arrested last week, has confessed that he helped Nirav Modi, who's the main accused in the Rs 13,700-crore PNB fraud, by creating shell companies to reroute money back to India. "In his series of statements, Wadhwa has admitted that he was assisting (Nirav) Modi, on his instruction, in the forming shell companies to launder the money," the ED source told IndiaToday.In.
Wadhwa also admitted that "(Nirav) Modi exploited the PNB's loan money for circular trading and round-tripping with the support of hawala operators, and to to build personal assets in India and abroad," the source added.
Source says Wadhwa is "cooperating" and has provided "strong evidence" against Nirav Modi. Despite initial reluctance, he has shared "all crucial details" with the agency, he add.
The ED's custody of Wadhwa will get over on Monday, after which the agency plans to seek his judicial custody before the special PMLA Court in Mumbai.
In the initial interrogation, Wadhwa has revealed that he conducted fraudulent transactions for Firestar International and Firestar Diamond International, the companies owned by Nirav Modi, and three other companies - Diamond R US, Stellar Diamond and Solar Exports - owned by his partner and maternal uncle Mehul Choksi.
On the instructions of Nirav Modi, Wadhwa allegedly created Hong Kong-based Sino Traders and Aura Gem to launder Rs 5,921 crore, the money Nirav Modi's companies received after the issuance of fake LoUs by some PNB employees. Aura Gems allegedly transferred Rs 468 crore to India in the Axis Bank accounts of Diamond R US, Stellar Diamond and Solar Exports. Likewise, the inward remittance figure to these three India-based firms for Sino Traders was Rs 506.69 crore. "This is nothing but round-tripping, where the money comes back in India," the source said.
Wadhwa is also accused of appointing bogus directors and shareholders in the Hong Kong-based Sino Traders and Auro Gems Ltd.
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