Nirav Modi fraud case: PNB releases new figures, requests audit

By

Isabelle Crossley

Published
Feb 28, 2018

Nirav Modi has filed for bankruptcy in the US following the Punjab National Bank (PNB) stating that the total sum in the fraud case could actually be 1,300 crore rupees (approximately 200 million US dollars) higher than first estimated.

The PNB has stated that the figure they previously released in the ongoing Nirav Modi fraud case, 11,300 crore rupees (approximately 1.7 billion dollars) may not be the full total - which could actually be closer to 13,000 crore rupees (1.95 billion dollars). It remains unclear how the issue, which involves around 30 other Indian and international banks who lent money to Nirav Modi and Mehul Choksi owned companies on false information, will be resolved.

Nirav Modi, who left India in January before the case broke, has initiated bankruptcy proceedings for his diamond business Firestar Diamonds. Although Firestar is not linked to any of the complaints listed by Indian authorities and the Central Bureau of Investigation (CBI), this is the company that Modi has chosen to liquidate. The bankruptcy filing was titled “Firestar Diamond Inc., 18-10509 U.S. Bankruptcy Court, Southern District of New York (Manhattan)” and reasons stated for filing include liquidity and supply chain challenges. The company has listed 100 million dollars in assets and debt in the filing (approximately 665 crore rupees) which was filed on February 26.

The CBI has now turned their attention to the PNB’s auditors who are being questioned over failing to discover the fraud earlier. The Ministry of Finance has instructed all Indian public sector banks to examine any bad loans over 50 crore rupees (approximately 7.5 million dollars) to make sure they are not fraudulent.