Nirav Modi case: How can a deputy manager give so much credit, asks ED official

Nirav Modi. File Pic

A day after it was revealed that the Nirav Modi scam likely runs into Rs 11,400 crore, the Enforcement Directorate (ED) now suspects that senior officials of the state-owned Punjab National Bank (PNB) were also involved. So far, only a deputy manager and a clerk from the bank have been booked, but it seems unlikely that they could have pulled off such a massive lending scam on their own.

ED officials raided Gili diamonds store at Viviana mall in Thane last night

Yesterday, the ED and Central Bureau of Investigation (CBI) raided 17 offices and stores belonging to Nirav Modi's jewellery business. As many as six properties were sealed in Mumbai alone, including the Worli residence of Nirav's wife, Ami Modi. The officials also seized gold, diamonds and jewellery worth Rs 5,100 crore.

Another outlet at Shoppers Stop was also raided and later sealed

Last week, PNB had lodged an FIR with the CBI, stating that letters of undertaking (LOU) worth R280 crore were issued fraudulently to Nirav Modi. On the basis of these letters, the billionaire jeweller was able to get credit from foreign bank branches. The CBI booked PNB deputy manager Gokulnath Setty (now retired) and single window operator Manoj Kharat for issuing the LOUs just three months before the former's retirement.

However, with the value of the scam now monumentally higher, the ED will now investigate senior officials at PNB too. An ED officer said, "How is it possible for a deputy manager to release such a huge amount of credit to somebody?

Skipped town long ago
The CBI has also booked Nirav, his wife Ami, brother Nishal, and uncle Mehul Choksi - all partners in three companies, Diamond R US, Solar Exports and Stellar Diamonds. Choksi is also the Indian promoter of the Gitanjali jewellery chain, which is also under the authorities' scanner.

However, sources said that Nirav left the country on January 1, long before the CBI received a complaint from PNB (on January 29). His brother Nishal, a Belgian citizen, also left the country the same day, while his wife Ami, a US citizen, and business partner Choksi, flew out on January 6. The CBI issued a lookout circular against all four on January 31.

Revoke their passports: ED
ED sources said, "We don't have details about their location, but will reach out to them for questioning." The ED has written to the External Affairs ministry to revoke the passports of Nirav and Choksi. The directorate is also examining whether round-tripping of funds took place. Round-trip transactions, also referred to as 'Lazy Susans', involve one company selling an unused asset to another company, while at the same time agreeing to buy it back at the same price. This tactic is used for tax evasion and money laundering.

Meanwhile, PNB said the diamantaire has made "vague" offers to repay some of the dues. A fortnight after the scam was first reported, PNB chairman and managing director Sunil Mehta said they have the capability to recover the dues from Modi and promised to take action against all wrongdoers.

The Securities and Exchange Board of India (SEBI) and the stock exchanges have also begun analysing the stock market trade details of all entities associated with Nirav and Choksi (who has already been under the scanner in the past for a brokerage default incident).

'PMO knew since 2016'
Congress communications in-charge Randeep Surjewala attacked the BJP government over this, questioning if the billionaire jewellery designer received a tip-off that prompted him to leave the country. Surjewala and other party leaders released a copy of a complaint by Bangalore resident Hari Prasad, seeking action against Nirav Modi and his business partner Mehul Choksi. Surjewala said this letter was acknowledged by the Prime Minister's Office on July 26, 2016, which means he was aware of the fraud.

He's not with us: BJP
The last public occasion Nirav Modi was spotted at was at the World Economic Forum in Davos, where he was photographed with PM Narendra Modi and the Indian delegation. Congress leader Randeep Surjewala, in a sardonic attack, said that 'Chhota Modi' (Nirav) went to Davos as part of the delegation, and further alleged that the PM knew about the scam. Union minister Ravi Shankar Prasad has clarified that Nirav was not part of the delegation Davos led by Modi, and had gone there on his own. He rejected the Congress' allegation that the PM had a private meeting with Nirav. "I wish to make it very clear on the behalf of the government that no one who has sought to derail ordinary banking system shall be spared, regardless of any individual's stature and status," Prasad told reporters.

Tweet talk

Rahul Gandhi @OfficeOfRG: 'Guide to Looting India by Nirav MODI: 1. Hug PM Modi 2. Be seen with him in DAVOS Use that clout to: A. Steal 12,000Cr B. Slip out of the country like Mallya, while the Govt looks the other way. #From1MODI2another'

Rs 5,100 crore
Value of diamonds, gold and jewellery seized

Rs 280 crore
Value of letters of undertaking Nirav Modi received from PNB

Inputs by Faisal Tandel

More more about the Nirav Modi scam:

Lookout notice issued after Nirav Modi escapes from India

Congress on Nirav Modi scam: PM did nothing to stop India's 'biggest bank fraud'

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