Published: Sat, February 17, 2018
Economy | By Melissa Porter

Moves to suspend passports of Nirav Modi, Mehul Choksi

Moves to suspend passports of Nirav Modi, Mehul Choksi

The premises raided by the ED here include Modi's residence in Kurla, his jewellery boutique in Kala Ghoda area, three company locations in Bandra and Lower Parel, three premises in Surat in Gujarat and Modi's showrooms in Chanakyapuri and Defence Colony in Delhi.

According to sources, an unspecified quantity of stocks of gold, diamond and other precious stones worth several hundred crores of rupees were seized during the raids, along with incriminating documents, computer discs and other materials.

On February 15, Enforcement Directorate reportedly conducted multiple searches in connection with a Rs280 crore money-laundering case against the designer and others following a complaint by PNB. In what could be the largest banking fraud in the country's history, Modi allegedly acquired illegal letters of undertaking from PNB through a junior ranking official, who did not route them through the Core Banking System in order to avoid detection.

A day after Punjab National Bank (PNB) announced that it had unearthed fraudulent transactions worth Rs11,400 crore at one of its branches in Mumbai, the key question is who is liable to pay this amount. "Now, we are told that Nirav Modi has also escaped (from) India". Nirav Modi was born in a family of diamond merchants.

He said the scam involved over 30 banks including Punjab National Bank, Allahabad Bank, Axis Bank, State Bank of India, Union Bank of India, Bank of Baroda, Indian Oversees Bank, Corporation Bank, Andhra Bank, Vijaya Bank, Canara Bank, ICICI Bank, IDBI Bank and the Export Import Bank of India. No wonder then that the Finance Ministry is insistent on structural reforms at public sector banks for more stringent approval of large loans, before it recapitalises them with Rs 2.11 lakh crore.

"The Modi Govt needs to come clean about its inaction on the Nirav Modi Scam".

PNB said in an announcement to the stock exchange on Thursday evening that it had suspended 10 employees during the investigation into the fraud, which Mehta said had gone on undetected for years.

"We await more details, but if the "other banks" have advanced money to overseas suppliers against PNB's letter of credit, PNB would have to honour the payments, in our view, and would have to seek to recover the money from these overseas suppliers", said Morgan Stanley analyst Sumeet Kariwala, in a note to clients on Thursday.

"On 12.02.2018, on the basis of investigation report, total fraud of Rs.11,394.02 crore in case of unauthorized issuance of Letters of Undertakings, Foreign Letter of Credits and Inland Letter of Guarantees in the group accounts of Nirav Modi Group & M/s Gitanjali Group and in the account of M/s. Chandri Paper & Allied Products Pvt". PNB shares closed down nearly 12% on Thursday.

Jaikishan J Parmar, Research Analyst told IANS that, "Some other banks in addition to PNB might be impacted as they too have given loans to these clients overseas", he said.

While addressing a press conference at party office in New Delhi Thursday morning, Congress media Incharge Randeep Surjewala showed a picture in which Nirav Modi can be seen along with Prime Minister Modi during his visit to Davos.

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