Twenty-one Indians, most of them from Mumbai and Gujarat, are among 50 persons arrested in Shenzhen in southern China after customs officers claimed to have smashed a long-running international diamond-smuggling racket routed through Hong Kong.
The arrests, made on Friday, were made public on Monday, the same day that three Chinese engineers were arrested in Chhattisgarh in connection with the fatal collapse of a chimney at a Balco power plant.
Distraught Mumbai-based relatives of some of the arrested Indians are now in Hong Kong, DNA has learnt. Indian consular officials in Guangzhou in southern China, who were informed of the arrests by Chinese authorities on Monday, will gain access to the detainees on Wednesday.
The Indians, some of whom were living in China or Hong Kong for five years, have hired a Chinese lawyer to defend them, sources familiar with the case told DNA.
According to Chinese customs officers, the arrests were the culmination of a two-month investigation following an October 2009 tip-off that mainland Chinese jewellery manufacturers in Shenzhen were sourcing diamonds from Indian suppliers, which had been smuggled across the border from Hong Kong by Indian and Hong Kong Chinese ‘shui ke’ (carriers).
On Friday, the dramatic operation involving 150 Chinese customs officers at the Luohu border crossing (between Hong Kong and Shenzhen) began with the arrest a 60-year-old Hong Kong Chinese man, surnamed Wong, who allegedly had three bags of diamonds hidden in pockets inside his waistband.
Based on information that Wong provided, police then arrested an Indian man from a nearby hotel, who was to meet Wong, and a second Indian who called Wong about the diamonds.
By the end of the hours-long operation, police had arrested 50 persons (including 33 foreigners), seized caches of diamonds, and sealed several small jewellery companies that they alleged were part of the smuggling racket.
No charge sheet has yet been filed; the authorities have up to 37 days to do it.
The sources told DNA that Chinese customs authorities were interrogating the Indian detainees for details of their “smuggling” activities and turnover of the past five years. The nationalities of the other foreigners arrested could not be immediately ascertained.
Sources familiar with the Indian diamond industry operations in China told DNA that small jewellery manufacturers in China sourced such smuggled diamonds to avoid paying a transaction tax applicable on mainland China. “This has gone on for many years,” said an informed source. “Every year, around the time of the Chinese New Year, a few token raids are conducted, and fines levied.”
But this time, the matter had been escalated, perhaps because of a continuing tussle within the Communist Party in Shenzhen, he speculated.
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