India's Central Bureau of Investigation (CBI) has issued look out circulars (LOCs) against the directors of Delhi-based diamond jewellery exporter Dwarka Das Seth International.

A look out circular orders all ports of entry to restrict the movement of the person against whom the notice has been issued and obliges port authorities to report any such attempt to the issuing agency.

Investigators are probing a letter of credit (L/C) and loan fraud case that allegedly caused losses of US$57 million for the Oriental Bank of Commerce (OBC).

Bank complaint

The CBI issued the LOCs against Sabhya Seth, Reeta Seth, Krishna Kumar Singh, Ravi Singh, the directors of the diamond jewellery exporting firm in Karol Bagh.

The agency had registered a case after OBC filed a complaint in August 2017 regarding bad loans and non-performing assets in 2014 after the firm collapsed and the directors fled the country.

L/C fraud

The bank complaint alleges that Dwarka Das Seth obtained loans through L/Cs and other facilities for gold jewellery imports and exports between 2007 and 2012 but failed to meet its payment obligations.

A bank probe found that the diamond dealers were round-tripping funds through fictitious companies abroad and utilised funds by discounting bills based on L/Cs provided by foreign banks.

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