PNB fraud | Case against Nirav Modi very short on proof, his legal team tells U.K. court

The five-day extradition trial opened at Westminster Magistrates’ Court in London on May 11

Nirav Modi. File

Nirav Modi’s legal team on May 12 told a U.K. court hearing the fugitive diamond merchant’s five-day extradition trial that the case of fraud and money laundering against him is not backed up with the underlying evidence that proves his dishonesty.

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Mr. Nirav Modi’s legal team made the remarks a day after Crown Prosecution Service Barrister Helen Malcolm, appearing on behalf of the Indian authorities, told the court that Mr. Nirav Modi acquired eye watering amounts of money fraudulently from the Punjab National Bank (PNB).

The 49-year-old jeweller is wanted in India on charges of defrauding PNB by deceitfully obtaining Letters of Undertaking (LoUs), or bank guarantees, and then laundering the proceeds of the funds through a complex set of worldwide transactions using dummy companies.

The five-day extradition trial opened at Westminster Magistrates’ Court in London on May 11, when the CPS argued on behalf of the Indian authorities to lay out the estimated $2-billion fraud and money laundering case against Mr. Nirav Modi.

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CPS Barrister Malcolm told the court that between 2011 and 2018, Mr. Nirav Modi had stolen eye-watering sums of money under the pretext of importing pearls into India.

“The difficulty is that none of this is proved. There is a lot of detail but the government of India’s case is very long on assertion but very short on proof,” said Mr. Nirav Modi’s Barrister Clare Montgomery, as the defence began its counter-arguments in the case on May 12.

Mr. Nirav Modi has been following the court proceedings via videolink from a room at Wandsworth Prison in south-west London, where he has been lodged since his arrest in March last year. Dressed in formals, he has been listening intently and can be seen occasionally making notes as he refers to a large folder on a desk.

The court has heard repeated references as precedence from liquor tycoon Vijay Mallya’s extradition case, which now awaits a Supreme Court level appeal approval.

Mr. Nirav Modi is expected to be lodged in the same Barrack 12 at Arthur Road Jail in Mumbai where Mr. Mallya is to be held following extradition in relation to his now-defunct Kingfisher Airlines’ unpaid loans to Indian banks.

While the CPS referred to the video and other assurances related to the prison cell already provided as sufficient proof of prison conditions in India meeting international human rights requirements, Mr. Nirav Modi’s lawyer indicated that they would be presenting a witness to prove that it lacked any provisions in relation to Mr. Nirav Modi’s fragile mental health condition .

District Judge Samuel Goozee is presiding over the hearing, which is expected to conclude on May 15 and is being conducted partly in a remote format to abide by the social distancing norms in place due to the coronavirus pandemic. While some of the legal counsels are physically present in court, the others are accessing the proceedings via videolink or through conference call.

On May 12, CPS Barrister Malcolm appeared via videolink to lay out the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) case against Mr. Nirav Modi co-conspiring with bankers at PNB to misuse at least 150 bank guarantees in 2017.

She also laid out details of how the diamond merchant and his brother then went on to intimidate witnesses, even threatening them with death, to try and cover up the fraud.

Mr. Nirav Modi has made repeated attempts at bail but remains behind bars as he is deemed a flight risk. The jeweller was arrested on March 19, 2019, on an extradition warrant executed by Scotland Yard on charges of fraud and money laundering brought by the Indian government and certified by the U.K. Home Office.