Tag: PNB bank scam

Nirav Modi Cannot Return to India for Fear of Being ‘Lynched’, Says Lawyer

“Being a (jewellery) designer, Modi is a sort of “artist” who cannot provide any financial information as desired by the ED.”

New Delhi: Fugitive diamantaire Nirav Modi, a key accused in the USD 2 billion PNB fraud case, cannot return to India as he is afraid of “getting lynched” and is being compared to demon ‘Ravan’, his lawyer told a special court on Saturday. The Enforcement Directorate (ED), however, dismissed the claim saying if he felt there were “security threats”, he should have filed a police complaint.

Nirav Modi’s lawyer Vijay Agarwal stated this while arguing before Prevention of Money Laundering Act (PMLA) court Judge MS Azmi against the ED’s application to declare Modi a fugitive under the Fugitive Economic Offenders Act.

Countering the ED plea, Nirav Modi also said through his lawyer that he had no record or data with him about his finances.

Referring to Nirav Modi’s claims of “security threats” in India, the ED said these points are “irrelevant” to the case.

The ED has claimed that Nirav Modi had refused to join the probe despite acknowledging mails and summons issued to him and that he doesn’t want to return to India.

Agarwal, however, said the diamond trader had responded to the emails sent by the investigating agencies and expressed his inability to return due to “security threats”.

“In a letter addressed to both the CBI and the ED, Modi stated that he was not able to join the probe because of security threats (in India) from private persons, the families of those who have been detained (in the PNB case), landlords, the creditors who have not been paid and the customers whose jewellery was taken away by the ED,” he said.

“My (Modi’s) 50-ft tall effigy was burnt in India. There was evidence of a mob lynching (against me) and I (Modi) was being compared with ‘Ravan’. I have been projected as evil and am being made the poster boy of the bank fraud,” said Agarwal.

He also claimed that Modi cannot be declared a fugitive as various legal requirements stipulated by the Fugitive Economic Offenders (FEO) Act have not been met by the investigating agency.

“The main reason the ED is seeking to declare Nirav Modi a fugitive is that he left India under suspicious circumstances on January 1, 2018. However, there was no criminal case (against him) when he had left the country,” Agarwal said.

“They cannot just say that he left the country under suspicious circumstances. They need to specify what those suspicions were. Also there is no material on record to say that he is refusing to return to India,” he said.

Also Read: PNB Fraud: Nirav Modi Seeking Political Asylum in the UK

Unlike liquor baron Vijay Mallya, who is accused of a loan default of over Rs 9000 crore, Modi had no Non-Performing Assets (NPAs) when he left the country, Agarwal argued.

He said that being a (jewellery) designer, Modi is a sort of “artist” who cannot provide any financial information as desired by the ED.

“All my (Modi) finances were taken care of by my employees who are already in the custody of the investigating agency. I have no record or data. What are they going to investigate with me, as they have taken away all my source of information,” Agarwal said.

Countering Agarwal’s submission, ED counsel Hiten Venegaonkar said all these arguments have nothing to do with the Fugitive Act (FEO).

“As far as security threats are concerned, any prudent person who is fearing threats to his life needs to file a police complaint. Until now, there is no material before the ED or the court (about any such complaint). So these points are irrelevant,” he said.

As per the investigating agencies, Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated the Punjab National Bank (PNB) to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

These LoUs were allegedly issued in a fraudulent manner by a Mumbai branch of the PNB to the group of companies belonging to Modi since March 2011 till the case came to light.

PNB Fraud: Interpol Issues Red Notice Against Nirav Modi’s Sister

The notice, which acts as an international arrest warrant, states that Purvi Deepak Modi is required on charges of “money laundering”.

New Delhi: Interpol has issued a red corner notice (RCN) against Purvi Modi, a Belgian national and absconding billionaire jeweller Nirav Modi’s sister, in connection with the alleged $2 billion PNB money laundering case, officials said Monday.

The notice, which acts as an international arrest warrant, states that Purvi Deepak Modi, 44, is required on charges of “money laundering”.

The RCN against her was requested by the Enforcement Directorate (ED), officials said.

The ED wants her to join investigations to take its investigation in the case forward, they added.

It named her in its first charge sheet in the case in March and charged her with laundering the alleged proceeds of crime generated by defrauding the Brady House branch of the Punjab National Bank in Mumbai.

According to the Interpol notice, Purvi speaks English, Gujarati and Hindi and is a Belgian national.

Once an RCN is issued against a fugitive, Interpol asks its 192 member countries to arrest or detain the person if spotted in their countries after which extradition or deportation proceedings can begin.

A similar Interpol notice was recently issued against Mihir R Bhansali, a top executive of Nirav Modi’s US business concern, on charges of money laundering.

A similar notice was issued against Nirav Modi sometime back as part of a joint probe by the ED and the CBI in the case.

The case pertains to cheating the state-run Punjab National Bank through the fraudulent issuance of Letters of Undertaking and Foreign Letters of Credit worth over $2 billion (about Rs 13,000 crore) by Nirav Modi and his uncle Mehul Choksi, both absconding since the first week of January.

Interpol Issues Red Corner Notice Against Nirav Modi’s Trusted Aide

The notice, which acts as an international arrest warrant, states Mihir Bhansali is being investigated by Indian probe agencies on charges of “money laundering”.

New Delhi: Interpol has issued a Red Corner Notice (RCN) against Mihir R. Bhansali, a close confidante and senior executive of absconding billionaire jeweller Nirav Modi, in connection with the alleged USD 2 billion PNB money-laundering case, officials said Thursday.

The notice, which acts as an international arrest warrant, states Bhansali (40) is required by Indian probe agencies on charges of “money laundering”.

The RCN against Mihir Rashmi Bhansali, CEO of Nirav Modi’s jewellery firm in the US, Firestar International, was requested by the Enforcement Directorate, they said.

The ED wants him to join the investigation in order to take the probe in the case forward, they added.

It had told the global police body that Bhansali was “likely” to visit the US, the UK, Hong Kong, China or the UAE.

In its RCN issued against a fugitive, the Interpol asks its 192 member countries to arrest or detain the person if spotted in their countries after which extradition or deportation proceedings can begin.

The ED has identified Bhansali as the “second-in-command” in the Firestar Group after Nirav Modi, and that “he was actively involved in the diversion and laundering of the funds received from the alleged fraudulently issued PNB LOUs (Letters of Undertaking).

“Bhansali was instrumental in rotation and diversion of the proceeds of crime generated in this case,” an official privy to the probe said.

ED’s investigation found that with the help of other officials of the Firestar Group, Bhansali “inducted dummy partners in Solar Exports, Stellar Diamond and Diamond R US (Modi’s firms in whose names LOUs were issued).”

“He was instrumental in the formation of overseas dummy companies in Hong Kong and Dubai, and employees/ex-employees of the Firestar Group were sent as dummy directors/owners in these entities at his directions,” the agency charged Bhansali.

The ED, as part of its probe under the Prevention of Money Laundering Act (PMLA), found that a “secure internal email communication system was developed at Bhansali’s insistence and its server was deliberately kept in Dubai.”

“Fund transfer, rotation of goods, melting of metal, dismantling of jewellery and low-quality jewellery production with high-value declaration were done on his instructions,” the agency charged.

The ED alleged that after the PNB fraud came to light, Bhansali “along with Nehal Modi (Nirav Modi’s brother), took 50 kg gold and substantial cash from Dubai, and directed dummy directors not to reveal his name before the authorities.”

It is alleged that the businessman is also a director in few of the dummy companies which are “controlled” by Nirav Modi and are based in the British Virgin Islands.

Bhansali is also said to have purchased a USD 7 million worth of property in the US “from the funds believed to be generated from the alleged PNB scam”.

Sometime back, a similar Interpol notice was issued against Nirav Modi even as India is seeking his extradition from the UK.

The case pertains to cheating the state-run Punjab National Bank through the fraudulent issuance of Letters of Undertaking and Foreign Letters of Credit worth over USD 2 billion (about Rs 13,000 crore) by Nirav Modi and his uncle Mehul Choksi, both absconding since the first week of January.

(PTI)

Mehul Choksi Wants Non-Bailable Warrants Cancelled, Says He Fear Lynching

Citing a fear of mob violence against him and a risk of lynching, Mehul Choksi, accused in the multi-crore PNB scam, has moved a special court for cancellation of the non-bailable warrants against him.

Mumbai: Gitanjali Gems promoter Mehul Choksi, a key accused in the multi-crore PNB scam, moved a special court here on 23 July seeking cancellation of non-bailable warrants issued against him, claiming that he apprehends mob lynching if he is brought to India.

A special Prevention of Money Laundering Act (PMLA) court had in March and July this year issued non-bailable warrants against Choksi after it took cognisance of the charge sheet filed by the Enforcement Directorate (ED) in the case.

Choksi, in his application moved before the special PMLA court, claimed he faces a threat to his life not only from his former employees and debtors but also from jail staff and inmates (where he would be launched if he returns).

“As it became impossible for the applicant’s company to function and the employees were not paid their salaries and debtors did not get their money back, all these persons have become agitated against the applicant and he is now facing threat to his life,” the application said.

Its claims continued, “There have been various cases of mob lynching in India. This recent trend of mob lynching and general public giving justice on the road is growing. Even the applicant faces a similar threat as there are several persons who have grievances and anger against him (Choksi).”

Choksi also faces a threat of extortion by jail staff, and danger to his life by jail inmates if he is brought to India and lodged in a prison here, the application said.

It claimed that Choksi never shied away from the investigation and has responded to all the communication he received from the investigating agencies.

The application also cited Choksi’s ill-health, the revocation of his passport and threat posed to his life as the main circumstances why he is unable to travel to India.

Special PMLA Judge MS Azmi directed the Enforcement Directorate to file its reply on Choksi’s application and kept the matter for further hearing on August 18.

Choksi, who is also facing a corruption case filed by the Central Bureau of Investigation,moved a similar application last month before a special CBI court, seeking cancellation of the warrant issued by that court.

The Punjab National Bank (PNB) had earlier detected a multi-crore scam, wherein diamantaire Nirav Modi and his uncle Choksi allegedly cheated the state-run lender to the tune of Rs 13,400 crore with the purported involvement of a few employees of the bank.

The scam, which reportedly began in 2011, was detected in January this year, after which PNB officials reported it to the agencies concerned.

While the CBI is probing the alleged criminal conspiracy, cheating and other offences under the Prevention of Corruption Act, the ED is probing the money laundering charges.

Finance Ministry Orders PSBs to Examine All Bad Loans Above Rs 50 Crore for Potential Fraud

These developments – which come after the second-largest PSB was hit by a Rs 13,000 crore fraud – are a form of damage-control but could further harm bank credit growth in the short-term.

These developments – which come after the second-largest PSB was hit by a Rs 13,000 crore fraud – are a form of damage-control but could further harm bank credit growth in the short-term.

Nirav Modi

Nirav Modi. Credit: Nirav Modi Jewels/Facebook

New Delhi: In a flurry of announcements on Tuesday evening, the finance ministry announced that it had asked all state-run banks to look for possible fraud in all loans above Rs 50 crore that had turned bad.

Rajeev Kumar, secretary in the department of financial services, also pointed out that it had a set a 15-day deadline for public sector banks (PSBs) to improve “oversight of operational and technological risks”.

“PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examine all NPA accounts > Rs. 50Cr for possible fraud.  Involve ED/DRI for PMLA/FEMA/EXIM violations if any,” Kumar tweeted out on Tuesday.

These developments – which come weeks after the country’s second-largest PSB was hit by a Rs 13,000 crore fraud – are a form of damage-control, but analysts and senior bankers believe that it could further harm bank credit growth in the short-term and put a wrench in the Modi government’s bank recapitalisation programme which was announced in late 2017.

For instance, Kumar pointed out that banks will now seek borrower status report from Central Economic Intelligence Bureau on accounts that turn into a non-performing asset and that the nodal agency for economic intelligence will have to revert in a week.

“What would happen before the PNB scam broke out is that lenders would only refer NPAs for a forensic audit if there were some warning signals that suggested the borrower was engaging in fraud. Not all NPAs above Rs 50 crore were scrutinised for fraud,” a senior banker, who declined to be identified, told The Wire.

“There is an official list of warning signals when it comes to detecting frauds in NPAs. After all, not all NPAs are fraud obviously. Some of the signals include ad-hoc sanction requests and large transactions in a short period of time,” the banker added.

Other banking experts, however, pointed out that the finance ministry was simply trying to see if it was possible to speed up the process of realising that a bad loan is due to fraud and then further classifying it as a ‘wilful default’.

For instance, apart from the PNB scam, two other recent bank frauds are indicative of why this process is currently taking too long. Last week, the Central Bureau of Investigation registered a case against Delhi-based jeweller Dwarka Das Seth International over fraudulent transactions worth nearly Rs 400 crore.

However, as it turned out, the bank in question (Oriental Bank of Commerce) had filed a complaint with the investigative agency nearly six months before a case was registered and made public.

Or, the case of Rotomac Global. Its account was declare a non-performing asset (NPA) all the way back in October 2015 and had started working its way through the debt recovery tribunal process over the last two years. However, it was only weeks after the PNB scam broke, that the CBI swung into action, arresting the company’s promoter and declaring that nearly Rs 3,700 crores of bank loan funds had been swindled.

On Tuesday, finance ministry secretary Rajeev Kumar also made public a list of “expected actions by lenders” including preparing reports on how to improve standards, identifying current overlooked weaknesses and directing all the boards of PSBs to “assign clear accountability” for implementation and compliance.

“The oversight in the banking system is obviously not good,” said Yuvraj Choudhary, an analyst at brokerage Anand Rathi told Reuters. “This could lead to uncovering of more potential scams. We can expect bottom-lines to be hit in the coming quarters.”

Firestar declares bankruptcy 

Firestar Diamond Inc, the flagship company of billionaire Nirav Modi who is at the centre of India’s biggest-ever bank scam, has filed for bankruptcy in the United States, reported Reuters.

The company has listed assets and liabilities in the range of $50 million to $100 million, according to a court filing in the Southern District Of New York on Monday.

Indian state-run lender Punjab National Bank had earlier this month unearthed fraudulent transactions at one of its Mumbai branches, the amount of which could now be about $2 billion.

Modi, founder of Firestar Diamond, and his uncle Mehul Choksi, who owns Gitanjali Gems Ltd, are suspected of colluding with two employees from Punjab National Bank in the fraud.

With inputs from Reuters.