Compliance officer, financial officer at Gitanjali Gems resign; website taken down too

While the Income-Tax (IT) raids on various stores of Gitanjali Gems go on, the company's Chief Financial Officer and Chief Compliance officer have resigned from their respective posts. 

CFO Chandrakant Karkare resigned citing wife’s health issues, according to a statement on exchanges.

Company’s compliance officer Pankhuri Warange also resigned. saying Gitanjali Gems needs to make disclosures under the Companies Act 2013.

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“I have advised the management on the required disclosures to be made. The absence of disclosure will have ramification not just on the company but also on the key managerial personnel,” he said. 

Over the weekend, the first information report (FIR) filed by the Central Bureau of Investigation (CBI) confirmed  that Gitanjali Gems along with two subsidiaries made some fraudulent transactions worth Rs 4,887 crore via letters of undertaking (LoU) and letters of credit (LC) that PNB officials issued to them illegally. 

Meanwhile, the Income-Tax Department on Saturday attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them.

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The department issued orders for provisional attachment of these accounts in various bank branches in Mumbai under the provisions of the Income Tax Act, 1961. There are around Rs 80 lakh in these accounts, official sources said.

They said the action was taken to "recover outstanding tax demands".

The accounts, according to an I-T document accessed by PTI, are in the names of Gitanjali Gems Limited (three accounts), Mehul Choksi (three accounts), Nakshatra World Limited (one account) and Ms Gili India Limited (two accounts).

The I-T department tester had initiated action against beleaguered diamond jewellery designer Nirav Modi and provisionally attached 29 properties and 105 bank accounts of him, his family and firms as part of its tax evasion probe, officials said.

The stock of the company tanked sharply in the last four days since the fraud came to the light. The stock shed as much as 46.22 per cent to Rs 33.80 since February 14 on the BSE, and is heading towards its all-time low of Rs 29.95.