The Enforcement Directorate searched multiple locations in connection with the Nirav Modi case.
Highlights
- Nirav Modi is being investigated by CBI for fraud worth Rs 11,300 crore
- Punjab National Bank had reported over Rs 11,000 crore fraud yesterday
- Later, CBI sources said they had received bank's complaints against him
Nirav Modi's home, showrooms and offices in Mumbai, Delhi and Surat were searched on Thursday after Punjab National Bank (PNB) complained of staggering fraud at the cost of the taxpayer to benefit the celebrity jeweller and others. Nirav Modi, recently seen in a group photo in Davos with Prime Minister Narendra Modi, flew out of India on January 1. The Congress accused PM Modi of helping "Chhota Modi" escape the country though he had been aware of a scam since 2016, when a whistleblower wrote to him on Nirav Modi's uncle Mehul Choksi and warned that he would leave the country. The government called the charge "shameful" and declared that "no one will be spared, no matter how big". Nirav Modi's passport will be revoked, said Union Minister Ravi Shankar Prasad.
Here are the 10 latest developments in this big story:
Nirav Modi, 48, is already being investigated by the CBI, which put out a lookout notice for him earlier this month. Based on a complaint by the bank, the agency had filed an FIR on January 31. In searches at 17 locations in the case on Thursday, the Enforcement Directorate said it had seized diamonds, jewellery and gold worth Rs 5,100 crore.
Last month, the star diamond jewellery designer was raided over charges that he and his associates swindled Rs.280 crore from India's second biggest government bank. In a new complaint this week, PNB pegged the scam at much more - around $ 1.8 billion or Rs 11,300 crore.
PNB told the stock exchange that its own officials at a single branch in Mumbai had helped Nirav Modi and others get credit without proper guarantees and in violation of rules. Taxpayers' money had been illegally transferred abroad, the bank said.
Nirav Modi, his wife, brother Nishal and uncle Mehul Choksi allegedly worked with bank officials to illegally obtain Letters of Undertaking, which were cashed overseas from different banks. All four left the country in the first week of January.
Letters of Undertaking are bank guarantees that lenders will be paid if there is default. The CBI was told that eight such documents were issued to the jeweler and it was not recorded in the books.
The fraud was revealed when Nirav Modi's companies sought a fresh loan. The officials who had helped them earlier had retired and when the bank insisted on guarantees, the companies allegedly said they had used the facility before. That's when the bank started investigating and learnt that fraud Letters of Undertaking had been issued.
The Congress and other opposition parties questioned how Nirav Modi was allowed to fly abroad and also be part of PM Modi's business delegation to Davos after the whistleblower's letter. In a stinging response, Ravi Shankar Prasad said Nirav Modi was not part of the Prime Minister's delegation and that he had gone on his own.
"Who is protecting Nirav Modi," the Congress had questioned, accusing the government of allowing big fish to get away without answering for crores in public money.
Rahul Gandhi and Arvind Kejriwal referred to liquor baron Vijay Mallya, who left the country in the middle of attempts by banks to recover huge unpaid loans from him.
"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," tweeted Congress chief Rahul Gandhi.
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