Jeweller Nirav Modi in PNB fraud case

By

Isabelle Crossley

Published
Feb 15, 2018

The diamond jeweller Nirav Modi is currently part of a Central Bureau of Investigation (CBI) case pertaining to fraud at the state-run Punjab National Bank (PNB) where the total reported fraud is around 11,400 crore rupees (approximately 1,714 million US dollars).

On February 5, the diamond tycoon, jeweller, and Firestar Diamond owner Modi was booked in connection with a fraud case that involved transactions totalling 280 crore rupees at the PNB. The case continued on February 14 when the PNB revealed that they have now detected fraud totalling 11,400 crore rupees at one of their branches in Mumbai.

The PNB did not specify on Wednesday if this new total was part of the same case that involves Modi but ABP Live News reported on February 15 that Modi has now fled abroad. ABP Live also stated that Modi is believed to have taken 2,000 crore rupees of the over 11,000 crore total and Mehul Chowksi, who some are saying is related to Modi, has taken 9,000 crore. On February 14, PNB’s shares fell by ten percent following news of the magnitude of fraud that has taken place.

The Nirav Modi case extends beyond the PNB. Workers at the PNB allegedly issued guarantees that helped Modi’s companies raise their credit rating without recording these actions in the core banking system. This allegedly allowed Modi’s companies to fraudulently secure loans from other banks including Allahabad Bank, Axis Bank Ltd, State Bank of India (SBI), Union Bank of India, and some foreign banks.

These banks are now blaming the PNB which has so far stated that they are not responsible for these after effects as they were carried out by employees who they have now suspended. The conclusion of this case will therefore impact on a number of Indian banks as well as on Modi’s luxury brands.