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Feb 23, 2011 at 10:19am IST

FDA probes Lilavati Hospital for fraud

Mumbai: The Food and Drug Administration has begun to investigate the quality of drugs purchased by Lilavati Hospital, just days after CNN-IBN exposed money-laundering at the hospital. CNN-IBN, in its report, had shown that Lilavati Hospital sourced medicines from 400 small individual medical stores, 250 of which are located in the slums of Dharavi.

Prabodh Kiritilal Mehta and Rashmi Kiritilal Mehta - exposed recently by CNN-IBN - figure in a list of people being investigated by the Government for allegedly having black money accounts overseas. The Mehta brothers own the Socalo Stiftung trust in Liechtenstein's LGT Bank. But along with their sons, Chetan and Bhavin, the two brothers are also trustees of Mumbai's 5-star Lilavati Hospital, where maximum city's rich and famous rush when they fall ill

After a month-long investigation, CNN-IBN now has documents that expose how over the last nine years, the Mehtas have siphoned hundreds of crores out of Lilavati Hospital into foreign accounts via the hawala route.

Between 2002-2010, nearly Rs 500 crore were spent on medicines and pharmceuticals at Lilavati. Of that, nearly Rs 250 crore were diverted via hawala into banks accounts at several tax havens.

Between 2002 and 2010, nearly Rs 125 crore were spent on medical instruments at Lilavati and about Rs 50 crore went into foreign accounts.

The five key foreign accounts are in: HSBC Private Bank (Bahamas), HSBC Private Bank (Mauritius), HSBC Private Bank (Singapore), ABN-AMRO Private Bank (Geneva), Credit Suisse (Dubai) and UBS (Dubai).

The official list of medical suppliers to Lilavati Hospital shows that since 2002, the hospital has not bought medicines directly from any manufacturers or even distributors. In fact, without any tenders or proper board approvals Lilavati gets its medicines from 400 small individual medical stores out of which 250 are located in the slums of Dharavi.

In the Lilavati balance sheets since 2005, Rs 35 crore is outstanding to Mayfair Realtors and Vesta Ltd. Mayfair Realtors and Vesta Ltd were contracted to deliver machinery to Lilavati.

But till 2011, they have not delivered even a screwdriver to the hospital.

Mayfair Realtors and Vesta Ltd is owned by Suresh Motwane, a declared absconder wanted in 40 cases of fraud and cheating by Mumbai police.

Prabodh, Rashmi, Chetan and Bhavin Mehta have also used crores of Lilavati Hospital money to fund their personal legal battles. But that's just the tip of the iceberg.

The CNN-IBN investigation has found that their foreign accounts are not just simple instruments of tax evasion, but used to facilitate large scale money laundering.

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