A businessman has been remanded in custody by Indian police on suspicion of involvement in a case involving a fraudulent letter of credit (L/C).

One man has already been jailed for his part in the one million US dollar fraud case.

Airport arrest

Kishore Jain, the owner of Ashok Metal, was arrested at Mumbai airport after returning from Singapore.

Police allege that in 2013, the Mumbai representative of steel firm Sabri Exim named Shehzad Merchant was looking for a firm that could procure L/Cs.

L/C procurementMerchant was approached by Yogesh Chaudhry, who claimed to own several companies and could also procure L/Cs in return for a commission.

Chaudhry said that Jain's firm could procure an L/C for Sabri Exim and told Merchant to transfer one million US dollars to Ashok Metal.

The money was transferred to Ashok Metal, but no L/C was procured for Sabri Exim.

Funds diverted

Instead, substantial sums were transferred to accounts related to Jain's business as well as firms that ostensibly belonged to Chaudhry but which were registered at fake addresses.

Chaudhry received a five-year prison term in October and is currently in jail.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.