The CBI has booked celebrity diamond merchant and billionaire Nirav Modi (46), his wife, brother, and a business partner for allegedly cheating Punjab National Bank (PNB) of over Rs 280.70 crore during 2017. The FIR has alleged, “The public servants committed abuse of official position to cause pecuniary advantage to Diamond R US, Solar Exports, Stellar Diamonds and wrongful loss of Rs 280.70 crore to PNB during 2017.”
Nirav has designer jewellery boutiques in several foreign countries such as London, New York, Las Vegas, Hawai, Singapore, Beijing and Macau. In India, Modi has his stores in Mumbai and Delhi.
He is the founder of $2.3 billion Firestar Diamond and counts among his clients several world renowned celebrities. He had also figured in the Forbes’ list of the richest Indians.
The CBI has acted on a complaint from the bank, which alleged that Nirav, his brother Nishal, wife Ami, and Mehul Chinubhai Choksi — all partners of Diamon R US, Solar Exports, Stellar Diamonds — cheated the bank in conspiracy with its officials.
In a response to an email sent to by a news agency seeking comments on the alleged cheating case, the company said, “This matter has no affiliation, legal or otherwise with Firestar International Limited which is the flagship enterprise of Mr Nirav Modi.”
A case has been registered under the Indian Penal Code (IPC) sections related to criminal conspiracy, cheating and provisions of the Prevention of Corruption Act. The agency had recently carried out searches at 21 locations, including Mumbai, Surat and Jaipur.
On January 29, 2018, PNB’s Mumbai branch Deputy General Manager Avineesh Nepalia complained to the CBI, saying that some of its officials were causing loss to the bank.
The bank has alleged in the complaint that a fraudulent issuance of Letters of Undertakings (LOUs) took place on January 16, 2018 for and on behalf of the accused firms, which approached the bank and presented a set of import documents to the branch with a request to allow buyers’ credit for making payment to overseas suppliers.
The bank officials requested the firms to furnish 100 per cent cash margin for LOUs for raising buyers’ credit. The firms contested this saying that they availed this facility in the past also, the complaint, now a part of the FIR, has alleged. However, the PNB branch records did not reveal details of any such facility granted to the said firm, it said.
The bank claimed that its deputy manager (now retired) Gokul Nath Shetty and Manoj Kharat had fraudulently issued LOUs without following prescribed procedure by obtaining required request applications, documents and approval of authorities and without making any entries in the bank’s systems.
The banks said they fraudulently issued eight LOUs totalling $4.42 crore, equivalent to Rs 280.70 crore, for Hong Kong-based Allahabad Bank and Axis Bank. The bank alleged that it is making an “in depth” enquiry to find outstanding LOUs which have not been detected in its system.
“While tracing old entries, it transpired that buyer’s credit based on fake LOUs might also have been paid through NOSTRO A/C,” it alleged. Claiming that public money to the tune of Rs 280.70 crore seems to have been “embezzled” by committing fraud, the bank asked the CBI to register the case.