Published: Fri, February 16, 2018
Economy | By Melissa Porter

PNB Fraud case: Nirav Modi left India a month before FIR

PNB Fraud case: Nirav Modi left India a month before FIR

The Bombay Stock Exchange (BSE) was informed through a filing by the PNB.

Modi had allegedly cheated the bank to the tune of Rs. 280.7 crore.

Nirav Modi, an Indian born jewellery designer and founder of Dollars 2.3 billion Firestar Diamond, has designer jewellery boutiques across three continents - in London, New York, Las Vegas, Hawai, Singapore, Beijing and Macau.

The countrys second largest PSU bank has detected a United States dollars 1.77 billion (about Rs 11,400 crore) scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoU) from a branch in Mumbai to secure overseas credit from other Indian lenders.

While the government desperately tried to explain the situation, a potentially more disturbing revelation has come to light. However, it has neither revealed nor clarified whether this is a separate set of transactions or linked to the earlier.

Shares in the bank have fallen by more than 10%.

PNB, which has assets of $120 billion, disclosed the fraud in a regulatory filing on Wednesday, saying it had referred the matter to law enforcement agencies. The fraud started in 2011. The official complaint says Modi, along with his wife, brother and business partner, worked with a pair of bank employees to get the letters. These were due on January 25 and February 6.

Defence Minister Nirmala Sitharaman reportedly blamed the UPA Government for the PNB Scam and said that this was detected during the present government. SBI and Union Bank of India have also raised similar claims.

The PNB virtually accused other banks' foreign branches of not sharing with it information or documents made available to them by these Indian companies at the time of availing buyers' credit from them. Similar letters of undertaking (LoUs) were also provided to other jewelry companies, such as Gitanjali Gems.

"This could subject PNB to significant potential impairments", he wrote, adding this could increase the bank's capital requirement by 80 billion rupees ($1.25 billion). He grew up in Belgium, dropped out of Wharton School at 19 to join the diamond business and his flagship company Firestar Diamond sources and distributes diamonds. The crisis could impact the bank's profitability this year.

Visuals of items seized by the Enforcement Directorate on Thursday.

Mr Prasad also objected to the language used by the Congress against Prime Minister Narendra Modi terming them as derogatory and demeaning.

As jokes began to fly about "NiMo" (Nirav Modi) and "NaMo" (Narendra Modi) as well as "Finding NiMo" (Nirav has left the country), the BJP scrambled to seek solace in the timeline, pointing out that when the picture was taken, there was no complaint against Nirav. ED sources have told the news portal that Modi is in Switzerland.

He said Modi had sent a formal message last week.

"The prime minister's refusal to come clean only points the needle of suspicion towards complicity in the loot of public money", Yechury said. The LoUs were issued without any security, enabling the companies to withdraw money from worldwide branches of other Indian banks.

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