GJEPC Responds to Fraud Crisis, Signs MOU To Create Jewelry Park in Mumbai

Legal
21/02/2018 17:46

On Saturday, February 17, 2018, India's Gem & Jewellery Export Promotion Council (GJEPC) released a statement on the incidents that have recently come to light with regards to the alleged fraud committed by two members of the Council. They state: "The Nirav Modi/Gitanjali Gems incident is of concern to the entire Gems & Jewellery industry. The Industry strongly condemns any sort of unlawful & illegal actions by any individual, trade or otherwise. It should be noted that when thousands of exporters undertake business lawfully adhering to all norms and practices, prescribed very diligently,  incidents of this kind can only take place due to non-adherence of procedures and norms laid down.  The Council strongly believes that this incidence will not have any contagion effect to the Gems & Jewellery Export Industry."

After detailing the stringent banking norms that apply to the industry, the industry body questions why certain large dealers seem to be above the law: "Going by the prevalent compliance system followed, chances of such vast irregularity without any detection across several Financial periods are extremely surprising and unreasonable. This only demonstrates lacunae in internal control system and failure or lack of fraud protection measures within the PSU. On one hand GJEPC is struggling to garner financing to the Gem & Jewellery exporters, especially the SME Export Sector, who are required to give upward of high collateral for the limit sanctioned to them, and here one finds this kind of clear advances (LoU) being provided by a bank without any safeguards, that speaks volumes of irregularities that needs to be thoroughly investigated." They continue, stating, "At GJEPC, we have always sensitized the financial institutions and Government for taking in right kind of risk management measures to prevent such incidents. Council is ready to assist and support all investigating agencies in all possible ways, reach the right conclusion and punish the guilty."

Their statement concludes by saying, "GJEPC condemns the incident and insists thorough investigation in the shortest possible time frame. The gems and jewellery sector contributes to 7% of country’s GDP, 15% of India’s merchandise exports and employs more than 4.5 million people of the country, thus making significant contribution to the country’s economy and maintains global leadership in processing of diamonds and gemstones. GJEPC would like to place on record that the Council is propagating amongst trade the 17 sustainable development goals of United Nations and the industry strictly follows ethical business practices and compliance to financial and procedural laws of the land.  Such odd instances can at no time hold representation whatsoever of a fraternity who has stood the test of time and contributed generously to the nation’s growth through enterprise, hardwork and integrity at all times."

Announces proposed jewelry park

As the Nirav Modi, Gitanjali Gems and Punjab National Bank fraud crisis dominates the headlines, the GJEPC has meanwhile announced the signing of an MoU with the Maharashtra Industrial Development Corporation (MIDC) to set up India’s largest jewelry park in Mumbai. To be called “India Jewellery Park Mumbai”, the proposed project will consist of 25 acres of land with four million sq. feet of constructed real estate which is said to be able to house more than 5,000 gem & jewelry units in varied sizes ranging from 500 to 10,000 sq. feet, the GJEPC elaborated. The jewelry park is expected to create some 100,000 new jobs in Maharashtra, and is estimated to attract investment of around $2 billion (INR 130 billion), the industry group said.

GJEPC Chairman Pramod Agarwal said, “Establishment of India Jewellery Park will contribute to the economic development of both Maharashtra and India, by facilitating investment, manufacturing, employment of manpower, trade and exports. This dynamic venture will provide effective support to jewellery manufacturers/traders who are interested to relocate, expand or invest in the state of Maharashtra and the region to initiate new business or strengthen their existing business, benchmarking with the Jewellery Parks created in countries like China, Turkey, Italy, Thailand, etc.”.

(AP Photo/Manish Swarup)