Surat : ED Raids Jewellery Firm for Rs 5K Crore Hawala Scam

Surat: The sparkling facade of Surat diamond district has been tarnished yet again, this time by a Rs 5,000 crore hawala racket allegedly orchestrated by a local jewellery firm. The Enforcement Directorate (ED) raided the premises of Sharanam Jewels LLP and its associate Vansh Marketing, both based in the Surat Special Economic Zone (SurSEZ), on suspicion of making “suspicious” outward remittances worth Rs 2,284 crore.

“This is not just a case of financial crime,” declared an ED official involved in the investigation. “It’s a web of deceit and manipulation that has siphoned off billions of rupees from the country’s coffers.”

The jewellery firms in Surat SEZ were searched under sections of the Foreign Exchange Management Act (FEMA).

The scam, according to the ED, involved Sharanam Jewels and Vansh Marketing, along with a network of shell companies, providing “accommodation entries” to various individuals and entities. These entries masked illegal money transfers through a labyrinth of complex import-export transactions.

“The modus operandi was ingenious,” the official explained. “They would import goods at inflated prices, overpaying for them with funds sent illegally from abroad. These inflated invoices then served as a cover to channel the money back out through outward remittances disguised as payments for those imports.”

The scale of the operation is staggering. Sharanam Jewels, a seemingly legitimate import-export firm, conducted transactions worth Rs 3,700 crore in the past two years alone. Yet, a physical verification of their inventory revealed a stark discrepancy – a paltry Rs 19.7 lakh in stock compared to the Rs 520 crore reported in their books.

This discrepancy, coupled with the “suspicious” outward remittances, painted a picture of a meticulously crafted scheme to launder money and evade foreign exchange regulations. The ED’s raids, freezing Rs 1.14 crore in bank deposits of the accused entities, mark a significant step in unraveling this complex web.

The shadow of this scam looms large over Surat’s diamond industry, already reeling from the Nirav Modi scandal in 2018. This latest episode raises questions about regulatory oversight and the potential for similar scams to flourish within the supposedly secure confines of SEZs.

“The investigation is ongoing, and the full extent of the scam is yet to be revealed. But one thing is clear: the glitz and glamour of Surat’s diamond district masks a darker reality, where billions of rupees are siphoned off through a network of deceit and manipulation” said a diamond industry analyst.

“The ED’s intervention is a glimmer of hope, but it remains to be seen if it can truly crack down on this deeply entrenched hawala racket and bring the perpetrators to justice” he added.