Hemchand Golecha's heirs, Indian Government stake claims to precious stones

The Golecha family (from left) Sudhir, Prabha and Hemchand: High stakesEveryone involved seemed to be relieved last month when the venue for a legal tussle was shifted from Jaipur, Rajasthan, to Geneva, the picturesque town in Switzerland. At stake were precious stones worth over Rs 3 crore, once the property of Jaipur jeweller Hemchand Golecha, who, after leaving the stones in safe custody in Geneva, disappeared in 1976 along with his vivacious British-born secretary N. Rolniks soon after his arrival in Rio de Janeiro, Brazil.Last month, Manjit Singh Bindra, director of the Enforcement Directorate Foreign Exchange Regulations Act (EDFERA), flew to Geneva with a massive load of files to stake claim to the stones. The Indian Government's decision to go after them follows a case filed against the Golechas for the recovery of over Rs 2 crore in income tax arrears. Besides this, EDFERA officials also contend that the gems were illegally exported from India and should therefore be returned to the country.Bindra's journey to Geneva came at the end of a stipulated five-year period after which a missing person is declared dead under Swiss law and his property handed over to his heirs. Golecha had left his jewels with Salas S.A., a Geneva firm dealing in precious stones, and, as a first step towards getting them, all the concerned parties - Hemchand Golecha's legal heirs, the Indian Government and Salas - had to file their claims in a Swiss court.Claims: The Indian Government is determined not to let the jewels slip away. Says Bindra: "We are not going to sit back quietly on this case. It involves the illegal export of a massive amount of emeralds and other precious stones."Retorts Sharad Golecha, the younger son of the missing jeweller: "We are going to stake our claim to the property left behind by our father." The Central Government has engaged Laliv and Boudil, a famous legal firm of Switzerland, to argue its case, but the Golechas have not engaged anyone as yet.The legal fracas began because Interpol and Indian intelligence agencies failed to find the missing Golecha, and Golecha's sons and other relatives accused the Government of apathy. Government officials, on the other hand, refuse to confirm that Golecha is actually dead; says one official: "Since he has not surfaced, one can only presume that he is no more."Government agencies including EDFERA were keeping a close watch on various firms owned by the Golechas for their alleged involvement in under-and over-invoicing of various export and import consignments since 1970, but came to know about the diamonds in Switzerland only when Sreechand Golecha, father of Hemchand Golecha accompanied by grandson Sudhir Golecha, flew to Geneva in July 1976, soon after being informed of the disappearance. They sued Salas-owner John Ashlyn, and pleaded that the diamonds be handed to them.According to Ashlyn, he was prepared to do so in return for a document confirming receipt. However, as Ashlyn claimed in an affidavit filed in Jaipur, this the Golechas refused to do.On February 22, 1977, a Geneva court ordered that the diamonds be handed over to a curator who would take care of them until Hemchand Golecha either reappeared or was deemed to be dead according to Swiss law. After that the stones would be disposed of as directed by the law.Dubious Connection: As the Golecha affair received much publicity in the local Swiss press, Indian diplomats posted in Geneva requested Indian revenue intelligence agencies to investigate the matter. Almost three years later Income Tax Department sleuths raided the premises of Golecha concerns and claimed to have recovered some "incriminating" documents.But nothing meaty was apparently found and Ashlyn came to their rescue when he filed a civil suit against the Golechas and demanded Rs 1 lakh as damages for Golecha's alleged 'fraudulent acts' in Switzerland.Although the case has never been heard in court, it did blow the Golecha-Ashlyn connection wide open. The Swiss dealer alleged that the Golechas had smuggled stones and other goods worth over $30 million (Rs 27 crore) out of India to Geneva, either directly or via Hong Kong, in the last 20 years.He also charged the Golechas with accumulating huge assets overseas. Ashlyn claimed that he was operating as a commission agent for the Golechas, hawking precious stones all over the world for the last 15 years. He produced invoices which allegedly proved that he was receiving two sets of sale documents for the same consignment - one for the Indian authorities and the second for the buyers.Acting on information provided by Ashlyn, two senior officials from EDFERA and the Directorate of Inspection (Income Tax) visited Geneva and San Diego, United States, in September 1980. The officials were shown documents which revealed that over six Indian companies dealt with Ashlyn. The documents also showed that Hemchand Golecha had left stocks of precious stones worth S3.23 million (Rs 2.9 crore).Secret Accounts: According to the report submitted by these officials to the Government, Ashlyn was the middleman for many jewellers of Johri Bazar in Jaipur. Says the report: "The documents obtained from Mr John Ashlyn also, prima facie, reveal that various parties of Jaipur had arranged with AshlynSalas S.A. for under-invoicing their exports of precious stones from India and retaining the difference there.In most of the cases, there is evidence pertaining to the retention of difference by Salas S.A. on behalf of these exporters. In some of these cases, the secret bank accounts into which the differences have been paid are also known.The officers found, for example, that Vimal Chand Golecha, step-brother of Hemchand Golecha, and also a Jaipur jeweller, allegedly transferred $131,000 (Rs 11.79 lakh) from a secret bank account to Ashlyn. Vimal Chand was arrested under FERA in February this year.Says Bindra: "Our officers have done an excellent job in this case; collecting and collating evidence, that too from abroad, is very difficult." On the basis of such evidence, EDFERA has now issued show cause notices to Sudhir and Sharad, Hemchand Golecha's sons.The Golechas predictably refute the allegations made by EDFERA and Ashlyn. Says Sharad: "Ashlyn is blackmailing us because we want our goods back and we will pay all the legal costs and excise duties applicable in such cases." In fact, members of the Golecha family accuse Ashlyn with concocting allegations against Hemchand Golecha, who they claim was one of Ashlyn's employees.Ashlyn himself admitted as much in a letter written to Dr Mohan S. Vishwan, then an income tax officer in Jaipur, in response to his query about Hemchand Golecha in 1973; the letter goes on to say; "To the best of our knowledge, Mr Golecha has no account at any bank in Geneva and we pay for all of Mr Golecha's expenses while he is active on our behalf."Weak Cases: Surprisingly, Ashlyn has not appeared in India since he filed his case against the Golechas in 1979. Nor has he maintained any communication channel with either the Golechas or the Central Government. Though revenue officials are tight-lipped about it, the non-appearance of Ashlyn has weakened many cases relating to FERA.Aware of the inherent weakness of its case, the Union Law Ministry has instructed EDFERA to adopt three methods of getting the diamonds back from Switzerland. These are:float a trust which can claim the diamonds from the Swiss court and keep them until the income tax cases are decided:in case the Swiss court rules in favour of the Golechas, invoke the Customs Act to bring the sale proceeds back to India to pay the taxes; andask that the diamonds be handed over to the Indian Government as they were illegally exported. The sale proceeds could be used to clear income tax arrears.Officials admit that the income tax argument does not stand up, and EDFERA is reportedly thinking of following the first option - formation of a government-sponsored trust which might be able to win the case in the Swiss court. It is clear that all the principals involved are going to have little time for the beauties of Switzerland as they try and get a firm grip on the glittering hoard.Published By: AtMigration Published On: Oct 25, 2013 14:00 IST--- ENDS ---

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Hemchand Golecha's heirs, Indian Government stake claims to precious stones

Everyone involved seemed to be relieved when the venue for a legal tussle was shifted from Jaipur, Rajasthan, to Geneva, the picturesque town in Switzerland.

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