Nirav Modi and Mehul Choksi's business practices revealed by investigation

By

Isabelle Crossley

Published
Mar 21, 2018

As the investigation into Nirav Modi and Mehul Choksi's accused fraud at the Punjab National Bank (PNB) continues, investigations have uncovered some of the pair’s business practices for moving money around.

Nirav Modi and Mehul Choksi, both of whom are out of the country and have refused to return for the time being, are accused of fraud totalling 12,300 crore rupees (approximately 1.9 billion US dollars). Modi has now been cited as responsible for 6,500 crore rupees (approximately 977 million dollars) of the fraud and Choksi is said to be responsible for the remaining 5,800 crore rupees (approximately 871.8 million dollars).

Despite the absence of the two main suspects in the Indian police investigation, the various groups involved have been able to unearth some of the diamond tycoon’s business practices. The Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and Serious Fraud Investigation Office (SFIO) have collectively found that Choksi brought money from overseas into his Gitanjali Gems account and then diverted this money into accounts of several shell companies in the guise of unsecured loans. This money was then withdrawn and used.

The ED has also sent letters to both Dubai and Hong Kong as well as ten other countries asking for details on Choksi’s shell companies located there. Most of the companies are said to be in Dubai and Hong Kong. Statements from the directors of these companies are still pending but the ED is convinced that there are companies are controlled by both Modi and Choksi.