Nirav Modi troubling India after fleeing India
A court (PMLA); was allegedly informed by two banks that they are incapable of letting out the money, which is present in the accounts of diamond trader and runaway Nirav Modi account of the firm he owns.
Nirav Modi’s Firestar International Limited account has the money, said the lenders.
The official liquidator filed an affidavit and claimed that ₹37 crores were still pending from Modi’s account of the firm he owned towards debt recovery. The appointment of the liquidator was done by National Company Law Tribunal.
According to October 2022; affidavit, the firm had a deposit of ₹17.98 crore with Union Bank of India, ₹2.67 crore with Kotak Mahindra Bank, and ₹16.32 crore with Bank of Maharashtra.
The court; under the (PMLA) Prevention of Money Laundering Act, instructed the release of the money to the banks in the liquidator’s favour.
Nevertheless, according to the affidavit, the banks stated they were unable to let out the money.
Kotak Mahindra Bank stated that the firm’s account was attached by the (ED) Enforcement Directorate and a day after by the (IT) Income Tax department. The agencies are examining money laundering charges against The Firestar group firms, owned by Nirav Modi, and against Nirav Modi.
“We had no option apart from making the payment (from the firm’s account) because the dues were legal, and there would be grave consequences if they were unpaid. So, a ₹2.46 crore demand draft (DD); was furnished in the favor of the department,” said Kotak Mahindra Bank.
But, The Bank of Maharashtra; said, “the money, held in the company’s credit balance, was adjusted against a loan account.”
The issue had been posted, and the order is supposed to be passed on 23 February.
The court was told that a notice had been issued by the IT department on 21 February 2019, asking the banks to clear the amount owed to the department by Firestar International Limited.
Union Bank of India has not filed its reply till now.
The banks should not have laid a finger on the money that was lying in the firm’s accounts without the permission of the court- said the liquidator.
The story of the Modi scam
Modi and his partners are accused of deceiving the Punjab National Bank; of more than Rs 13,000 crores. They were allegedly making profits with the help of fraudulent transactions, which included LoUs-letters of undertaking that were issued by the Punjab National Bank.
The runaway, diamond trader; is being investigated under the Prevention of Money Laundering Act by the Enforcement Directorate.
In October, the Mumbai court gave the Enforcement Directorate the authority to attach 39 properties owned by Modi, ANI reported. An application from Punjab National Bank was allowed by the court, which was trying to fasten nine properties hypothecated or mortgaged by Modi and his partners.
In July, ED had attached jewellery, gems, and bank balances amounting to Rs 253.62 crore of firms linked to the runaway trader.
The scam faced by, The Punjab National Bank is related to Fraudulent (LoUs); letters of undertaking issued by the bank amounting to Rs 10,000 crores.
The main accused in the case were, Nirav Modi (jeweller and designer), other relatives, his maternal uncle Mehul Choksi, and some PNB employees.
Nirav Modi and his relatives made their escape from India at the beginning of 2018, just a few days before the scam came into the headlines. The PNB scam is entitled to be the biggest fraud in Indian banking history.
The bankers had used fake (LoUs) Letters of Undertakings at the Brady House branch of PNB in Fort Mumbai. The LoUs were; started in favour of Indian bank’s branches for one year for the pearl imports. The Reserve Bank of India laid out guidelines and a total of 90 days from the shipment date period.
Guidelines given by The Reserve Bank of India were ignored by the overseas branches of the Indian banks. They did not share any information/documents with PNB that were made available by the firms to them at the time of availing credit from them.
Nirav Modi received his first fraudulent assurance from PNB on 11 March 2011 and later succeeded in gaining more than 1,212 such assurances for 74 upcoming months.
Bank token devices used by the runaway diamond trader of the foreign dummy companies to transfer fraudulent funds were recovered by The Enforcement Directorate.
Nehal Modi, Nirav’s brother, had ensured to destroy the devices and secured a United Arab Emirates (UAE) server shortly after the scam was made public. The fraudulent PNB LoUs were being received, by the dummy firms, which were, located in the British Virgin Islands and additional offshore financial centres.
In the PNB fraud case, the Enforcement agency so far had seized immovable and movable properties to a whopping Rs 2362 crores.
How was the Punjab National Bank management oblivious to this scam by Modi?
Misuse of the SWIFT network to pass on messages to Axis Bank and Allahabad Bank for fund requirements was done by the PNB employees. Because all of this was practised using the SWIFT passwords, the record of transactions was not registered in the core system of the Bank- which led to PNB management being in the dark for years till the scam aired on the news.
How did the Modi scam unfold?
PNB, on 29 January 2018, lodged an FIR with CBI stating that LoUs, which were fraudulent, amounting to (Rs 280.7 crores) Rs 2.8 billion, were issued in January at first. PNB, in the complaint, had mentioned three diamond firms, Solar Exports, Diamonds R Us, and Stellar Diamonds.
The scam, as of 18 May 2018, had blown up to more than Rs 14,000 crore.
Who is Nirav Modi?
Nirav Modi is a designer and luxury diamond jeweller, on the Forbes list of billionaires in 2017 at 57th rank. The Nirav Modi Chain of diamond jewellery retail stores; was founded by him.
He is the Chairman of the parent of the Nirav Modi chain, Firestar International, which includes stores in main markets around the world.
He also has stores in diverse locations, namely 16, in Mumbai, Delhi, Hong Kong, New York, Macau, and London.
He is presently hiding in the United Kingdom after fleeing from India and can seek Political asylum in Britain.