The Enforcement Directorate (ED) on Thursday seized diamonds and gold worth ₹5,100 crore from billionaire Nirav Modi’s firms and carried out searches across five States in connection with alleged fraudulent transactions equivalent to ₹11,500 crore in the Punjab National Bank.
While the businessman’s passport has been revoked by the government, the ED and the Central Bureau of Investigation (CBI) have issued look-out notices against him and his three family members, who flew out of the country last month.
Left country on Jan. 1
The diamond merchant had left on January 1 and was in Davos during Prime Minister Narendra Modi’s recent visit. While he was part of a photo session with the Prime Minister, the government has said that he was not a member of the official delegation.
Stating that those found guilty would not be spared, Union Law Minister Ravi Shankar Prasad said the government took swift action after the CBI received the bank’s complaint against the accused.
“Those who have tried to derail the banking system will be punished regardless of their position in the institution,” he added.
Nirav Modi’s brother Nishal, a Belgian citizen, also went abroad on January 1. The billionaire’s wife Ami, a U.S. citizen, left on January 6 and their uncle Mehul Choksi flew out on January 4. All the four have been named as accused in the case registered by the CBI on January 31.
- Jan. 29, 2018 : Punjab National Bank lodges the first complaint about the multi-crore fraud with the CBI
- Jan. 31, 2018 : CBI requests for issuance of lookout circulars against Nirav Modi, kin
- Feb. 13, 2018 : PNB alleges 150 Letters of Undertaking were issued by a branch to three firms linked to the accused
- Feb. 15, 2018 : Government revokes Nirav Modi's passport. The ED conducts searches across 5 States
On Thursday, the ED searched 17 locations linked to the businessman and other accused in Delhi, Mumbai, Surat, Jaipur and Hyderabad. The agency sealed six premises and seized diamonds, gold and jewellery, besides ₹3.9 crore in fixed deposits.
The CBI, which received the first complaint on January 29, carried out searches at 20 locations on February 3-4. The agency seized 95 import bill applications apparently used for getting Letters of Undertaking (LoUs) from PNB for raising buyer’s credit from overseas branches of Indian banks on requests for settling import bills.
The bank at its full capacity, will take every action to book wrongdoers - Sunil Mehta, PNB CMD
The agency has received two more complaints involving a total of 150 fraudulently issued LoUs from the bank’s Brady House mid-corporate branch in Mumbai between 2011 and 2017.
The bank has named two officials, the then Deputy Manager Gokulnath Shetty and his subordinate Manoj Kharat, for their alleged role in issuing LoUs to three firms, Diamond R US, Solar Exports and Stellar Diamonds. Mr. Modi and his relatives are partners in these firms.
The fraud was detected on January 16 when the firms approached the branch with a set of import documents with a request to allow buyer’s credit for making payment to overseas suppliers. The officials found that the firms had no sanctioned limit. When they requested for at least 100% cash margin for issuing the LoUs, the firms contested that they had been availing of this facility in the past also without any such arrangement. The officials then checked the records and found that no such entries had been made in the bank’s central database.