Nirav Modi Booked in Bank Cheating Case

New Delhi: The Central Bureau of Investigation (CBI) has booked billionaire jeweller Nirav Modi, his wife, brother and partners for allegedly cheating Punjab National Bank (PNB) of Rs. 280.7 crore, reports the livemint.

The agency acted on a 29 January complaint from the state-owned lender, which alleged these people conspired with some of its own officials, causing the bank “wrongful loss”.

“The public servants committed abuse of official position to cause pecuniary advantage to Diamonds R US, Solar Exports and Stellar Diamonds and wrongful loss of Rs280.70 crore to PNB during 2017,” said the first information report (FIR) filed by CBI. Mint has viewed a copy of this FIR.

Modi, his wife Ami, brother Niral and Mehul Choksi are partners in Diamonds R US, Solar Exports and Stellar Diamonds, said the FIR.

Modi did not reply to an email seeking comment. However, his spokesperson sent the following response: “This matter has no affiliation, legal or otherwise with Firestar International Ltd, which is the flagship enterprise of Mr. Nirav Modi.”

In an email statement, a spokesperson for Mehul Choksi said he was a former partner of Diamonds R Us and had retired in 1999. The statement added Choksi “never had anything to do” with Solar Exports and Stellar Diamonds.

PNB’s complaint said these diamond firms — Diamonds R Us, Solar Exports and Stellar Diamonds—approached it on 16 January with a request for buyers’ credit for making payment to overseas suppliers. The branch officials sought 100% cash margins for issuing letters of undertakings (LoUs) for raising buyers’ credit.

At that time, these firms, however, contested they have been availing of the facility in the past, but the branch records did not show details of any such facility having been granted to the said firms, the FIR added.

The bank said in its complaint that a deputy manager, Gokulnath Shetty, who was posted in the bank’s foreign exchange department in Mumbai since 31 March 2010, along with another official, Manoj Kharat, had fraudulently issued LoUs to these firms without following prescribed procedure and without making entries in the banking system, avoiding detection of transactions.

Shetty and Kharat could not be immediately reached for comment.

“The bank management has decided to take strong action against these firms and clean up the system as soon as it was brought to our notice,” said Sunil Mehta, managing director and chief executive, PNB.

PNB also claimed in the FIR that these officials had issued a total of eight LoUs worth $44.2 million or Rs280 crore, favouring the Hong Kong branches of Allahabad Bank and Axis Bank, which were due on 25 January.

Axis Bank and Allahabad Bank did not reply to mails seeking comment. PNB said it will be making an in-depth enquiry of the records to find out outstanding LoUs, which are otherwise not available in the system.