Mumbai, July 25, 2022 – In a significant development in the ongoing investigation into a massive Rs. 1,593 crore financial fraud, the Sessions Court in Mumbai granted bail to Harakchand Manmal Shah, a 65-year-old businessman, who was arrested in connection with the case. Shah, accused of facilitating fraudulent foreign remittances through his Hong Kong-based company, was released on a personal bond of Rs. 1 lakh with stringent conditions.

The case, registered as Crime No. 93/2015 by the Economic Offences Wing (EOW) Banking unit, alleges a complex conspiracy involving several companies, including M/s. Tejal Impex Pvt. Ltd., M/s. Latika Gems Pvt. Ltd., and others, to cheat the Government of India. The modus operandi involved creating false and forged import documents to facilitate illegal foreign outward remittances through various banks, including Bank of India, ICICI Bank Ltd., Yes Bank, and IndusInd Bank.

The Allegations and the Arrest

According to the prosecution, the accused individuals opened bank accounts specifically to execute fraudulent foreign remittances between December 13, 2013, and January 21, 2014. They allegedly used forged Bills of Entry, resembling genuine documents, and fabricated invoices for the import of rough, cut, and polished diamonds. These forged documents, bearing counterfeit signatures and seals of customs officials, were presented to banks to facilitate the outward flow of substantial foreign exchange.

Shah, the director of M/s. Top Nice International Trading Ltd. in Hong Kong, was implicated for receiving Rs. 19.47 crore through foreign outward remittances from M/s. Yogeshwar Diamonds Ltd. The EOW alleged that Shah benefited from the scam, which relied on forged Bills of Entry.

Shah was arrested on May 23, 2022, and his initial bail application was rejected by the trial court on June 17, 2022.

Shah’s Defense and Court’s Observations

In his defense, Shah, represented by Advocate Satish Maneshinde, claimed that he opened the Hong Kong company and bank account at the behest of co-accused Manish Babel, a broker from Opera House. He asserted that he intended to secure a loan at a lower interest rate for his business and required the company to demonstrate transactions. He denied forging any documents and stated that he sold the company to one Sabirbhai in June 2014, severing all ties.

Shah also argued that Babel misused his company and bank account for local trading in Hong Kong, sending remittances without his knowledge. He maintained that he cooperated with the investigation by providing Babel’s contact details and emphasized that he was not a signatory to any of the allegedly forged documents.

The court, presided over by Additional Sessions Judge Anand Pandurang Kanade, carefully considered the evidence and arguments presented by both sides. The court examined the statements recorded by the Enforcement Directorate (ED), where Shah admitted to opening the company and receiving a device to operate the bank account. However, he also clarified that he had not signed any forged documents and that Manish Babel had used his account to receive remittances from Indian companies.

Furthermore, the court took note of Manish Babel’s statement, where he admitted to using Shah’s account and receiving a commission of Rs. 4 lakh, out of which Rs. 2.5 lakh was paid to Shah. Babel also disclosed that he handed over the device to Akash Jain for fund transfers.

Bail Granted with Conditions

After analyzing the evidence, the court concluded that Shah’s role was limited to opening the company and receiving a commission for the use of his account. The court emphasized that Shah was not the apparent beneficiary of the crime proceeds and was not a signatory to the forged documents.

“In view of the foregoing discussion, it is evident that no purpose is going to be served by way of further detention of the applicant/accused behind the bars,” Judge Kanade stated in the order.

The court granted bail to Shah on a personal bond of Rs. 1 lakh with one or two solvent sureties of the same amount, subject to the following conditions:

• Shah must mark his attendance with the Investigating Officer as and when required.
• He must furnish his permanent residential address with proof and contact details of himself and two close relatives.
• He is prohibited from leaving India without prior permission from the trial court and must surrender his passport.
• He must not influence witnesses or tamper with evidence.
• He must not engage in any criminal activity while on bail.

The court also warned that any breach of these conditions could lead to the cancellation of his bail.

Ongoing Investigation

The investigation into the Rs. 1,593 crore scam is ongoing, with several co-accused still at large. The EOW continues to probe the intricate network of individuals and companies involved in the fraudulent activities. The granting of bail to Harakchand Manmal Shah marks a crucial stage in the judicial proceedings, highlighting the complexities of financial crimes and the challenges of unraveling large-scale conspiracies.