A valuer accused of inflating the worth of jewellery and gemstones pledged by Gitanjali Gems Ltd., owned by Mehul Choksi, will continue to face charges of cheating and criminal conspiracy. The decision came after a special court found sufficient evidence suggesting the valuer assisted Choksi in obtaining a loan under false pretenses. However, the court dismissed charges related to forgery against the valuer.
In 2022, the Central Bureau of Investigation (CBI) registered a First Information Report (FIR) against Gitanjali Gems, Choksi, and others, alleging they defrauded the Industrial Finance Corporation of India (IFCI). According to the CBI, a loan of Rs 25 crore was secured from IFCI by pledging jewellery, including gold and diamonds, which were later found to be of low-quality, lab-grown diamonds. Despite this, the valuation reports falsely indicated a higher value, leading to the approval of the loan.
Pradip Shah, a valuer implicated in the case, challenged a lower court’s decision to summon him on charges of forgery, cheating, and criminal conspiracy. The special court, in a ruling last month, upheld the charges of cheating and conspiracy but dismissed the forgery charge.
Special Judge V P Desai noted that there was enough evidence to suggest Shah played a role in the fraudulent scheme. “The material collected by the investigating officer shows that Shah, through inflated valuation, misled IFCI, enabling Choksi to secure a large loan which would not have been granted otherwise,” the judge said.
Shah had argued that the forgery charge was not applicable because the valuation report was not forged. He also contended that the cheating charge was baseless since the valuation was conducted in 2016 when Gitanjali Gems was still a luxury brand. He pointed out that by 2018, when IFCI reassessed the valuation, the company was in financial trouble, and its value had dropped significantly. Shah maintained that his report reflected the products’ current value at the time.
The court stated that the issue of Gitanjali Gems’ brand value in 2016 versus its condition in 2018 would be addressed during the trial.
In addition to this case, Gitanjali Gems, Choksi, and associated companies are also facing separate investigations by the CBI and the Enforcement Directorate (ED) related to alleged fraud against Punjab National Bank. Proceedings to declare Choksi a fugitive economic offender are ongoing.