Enforcement Directorate (ED) investigation has discovered that absconding jeweller Mehul Choksi diverted over Rs 32.50 billion funds, allegedly defrauded from a PNB branch in Mumbai, to foreign shores and he was in business of highly inflating prices of precious metals sold from his outlets.

The businessman has rejected the charges as baseless.

The agency is probing about Rs 130 billion alleged bank fraud that also involved his nephew Nirav Modi, said Choksi was using several dummy companies to rotate funds and to divert money for his personal use.

In its chargesheet, the Enforcement Directorate has said Choksi allegedly diverted $56.12 million (about Rs 4 billion) of loan funds to Nirav Modi and about USD 50 million (Rs 3.60 billion approx) to Modi's father Deepak Modi.

"For in-between transactions, dummy companies were used for layering purpose wherein only sale/purchase bills were created and no movement of goods used to take place. He has been doing this to project inflated turnover to avail higher banking facility," the Enforcement Directorate (ED) has said in its charge sheet filed against the absconding businessman who is in Antigua now a days.

The agency said it has detected that funds to the tune of Rs 32. 57 billion, that were obtained from PNB's Brady House branch in Mumbai, were "diverted" to countries like Thailand, the US, Belgium, UAE, Italy, Japan and Hong Kong and were deposited in group entity firms.