ED, CBI Tighten Noose Around Nirav Modi, Choksi In PNB Fraud Case

By SM.17 Feb, 2018





NEW DELHI: The Enforcement Directorate (ED) and the CBI today tightened the noose around billionaire diamantaire Nirav Modi following Punjab National Bank’s disclosure of a Rs 11,300-crore scam by the jeweller. A case was registered and several properties belonging to the jeweller were raided.


Here are all the latest developments from the case.

"There have been reports that in wake of fraud, RBI has directed PNB to meet its commitments under Letter of Undertaking to other banks. RBI denies having given any such instructions. It"s case of operational risk arising on account of delinquent behaviour by one or more employees of the bank & failure of internal controls. RBI has already undertaken supervisory assessment of control systems in PNB and will take appropriate supervisory action," the Reserve Bank of India said.

* The ED issued summons to Nirav Modi and his business partner Mehul Choksi under the Prevention of Money Laundering Act (PMLA) to appear before its Mumbai office on February 23. It also registered another case against the jeweller.

* Thirty-five new locations were raided, covering 11 states, by the ED. Diamond and gold worth Rs 549 crore was seized, bringing the total recovery to Rs 5649 crore. Twenty-nine immovable properties were also identified during the raids.

* ED also directed Nirav Modi"s company head office to make sure that "no sales should take place at its four outlets abroad - Macau, Beijing, New York and London".

* Raids were conducted by the ED at a showroom of Gili Jewellers in Thane"s Viviana Mall in connection with the case. The showroom was sealed after the raid.

* The CBI approached the Interpol to locate Nirav Modi and his family who had left the country in the first week of January, weeks before scam was reported to the agency.

* Earlier today, the CBI registered a fresh FIR against the Gitanjali Group promoted by Choksi, Nirav Modi"s uncle, following a complaint from Punjab National Bank.

* The CBI today carried out searches at 32 locations in the Gitanjali Gems Limited case covering the five states of Maharashtra, Gujarat, Rajasthan, Telangana, and Tamil Nadu, which included the premises of Gili India and Nakshatra branch.

* The External Affairs Ministry today suspended with immediate effect the passports of Nirav Modi and Choksi for four weeks.

"We are not aware of his whereabouts. However, after suspension of his passport, he cannot move to a different location. Wherever he is, he will remain in the same country," the MEA spokesperson said.

* Income Tax authorities too have stepped up action against Nirav Modi under the Provision of the Income Tax Act, 1961, and the Black Money and Imposition of Income Tax Act, 2015. The department has also attached 105 bank accounts of Nirav Modi, family members and group concerns, and issued notice under the Black Money (Undisclosed Foreign Income and Assets) and imposition of Income Tax Act, 2015.

* The prosecution in case of Nirav Modi has been filed under the Income Tax Act, hearing has been fixed on February 27.

* Ministry of Corporate Affairs has identified about 150 shell companies for investigation.

* Shares of Gitanjali Gems today plunged by 20 percent in morning trade.

* Finance Ministry sources on Friday said that PNB is fully capable of taking the entire hit of the fraud.

* Union Home Minister Rajnath Singh on Friday said that effective action will be taken against the accused in the scam.

* Bollywood actor Sidharth Malhotra, who featured in the ad campaign for Nirav Modi jewels, on Friday said his contract with the latter"s company got over a year ago. "That is something not related to us. I have nothing to say on it," said Sidharth.

* A day after a photograph emerged in which Nirav Modi was seen standing together with Prime Minister Narendra Modi, Ministry of External Affairs said that the picture was impromptu and also dismissed reports of a meeting between the two.

* "The State Bank of India does not have any direct exposure to high profile fraud-accused jeweller Nirav Modi, but the public sector bank does have an exposure to the tune of $212 million by way of a Letter of Undertaking issued by the Punjab National Bank," said SBI chairman Rajnish Kumar on Friday.

* An independent valuation of the valuables seized during raids related to the jeweller, estimated to be worth around Rs 5,100 crore, has been started by the ED.

* Congress president Rahul Gandhi in a tweet alleged that Prime Minister Narendra Modi acted as a "catalyst" to facilitate the escape of Nirav Modi out of India.

* The BJP hit back at the Congress, retorting that the scam had actually "started during UPA"s reign in 2011."

"It is the alertness of the NDA government which has brought this scam to light," said Union minister Prakash Javadekar.

On Thursday, reports had emerged that Nirav Modi, who allegedly carried out fraudulent transactions worth over Rs 11,400 crore in PNB, had left the country in the first week of January.

The billionaire diamond merchant, a regular on the lists of rich and famous Indians since 2013, was booked by the CBI, along with wife, brother and Choksi on January 31, for allegedly cheating the state-run PNB to the tune of Rs 280 crore.

The bank again approached the CBI within a fortnight of the first complaint giving details of more transactions which were over Rs 11,400 crore.

The bank has claimed in three complaints to the CBI that so far it has detected 150 Letters of Undertaking (LoUs) which were fraudulently issued by its officials in connivance with Nirav Modi and the other accused in the case, the officials said.

A LoU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.