PNB closed all options to recover dues by going public: Nirav Modi

MUMBAI: Nirav Modi the kingpin behind the largest banking scam in the country s history has virtually wrung his arms in the air saying PNB s overzealousness has shut the doors on his ability to clear the dues which he claimed is much lower than the bank has gone public with. In a letter Modi wrote on February 15/16 to the PNB management a copy of which PTI has seen he pegged the amount his companies owes to the bank under Rs 5 000 crore. The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns. This thereby jeopardised our ability to discharge the dues of the group to the banks Modi who left the country along with his family in the first week of January wrote in the letter. In the anxiety to recover your dues immediately despite my offer (on February 13 a day before the public announcement and on 15 ) your actions have destroyed my brand and the business and have now restricted your ability to http://getcosmetic.com/author/kkmytata/ recover all the dues leaving a trail of unpaid debts he said. The letter also refers to the extended discussions between him and between his representatives and the bank officers and also his emails on February 13 and 15 2018. It can be noted that PNB the second largest state-run bank had on February 14 informed the exchanges of detecting USD 1.77 billion fraud at its Brady House branch in Horniman Circle area of south Mumbai and named the firms led by Modi and his uncle Mehul Choksi s Gitanjali Group and some other diamond and jewelry merchants as suspects. The bank has also filed criminal complaints with CBI and the ED both of which launched nationwide searches on dozens of offices and residences of the alleged fraudsters. The bank has named Modi s brother his American wife Ami and uncle Choksi besides some others in the FIR. On the over Rs 11 000-crore loss claimed by PNB in the FIR Modi said as you are aware this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. Even after your complaint was filed in good faith I wrote to you saying please sell/allow me to sell Firestar Group or their valuable assets and recover the dues not just from Firestar Group but also from the three firms. Valuing his domestic business at around Rs 6 500 crore he said this could have helped reduce/discharge the debt to the banking system but quickly added that this is not possible as all his bank accounts have been frozen and assets have been sealed or seized. He goes on to state that PNB had time and again acknowledged that the buyers credit facility has been extended by it to the three partnership firms since several years; that there has been no default on the part of any of these firms over all these years; that money has gone through PNB over all these years for the repayments of the advances given by the overseas bank branches under the buyers credit. That Firestar International and Firestar Diamond International have never been in default to any bank and the bankers are fully secured . He also states that PNB has over the years been earning bank charges to the tune of crores of rupees on the buyers credit facility extended by PNB to the three partnership firms and that PNB has extended the money to the firm s buyers as well from where also it has been receiving full payments with interest and on time all these years. On the valuables that CBI/ED searches yielded Rs 5 649 crore he said these and other assets of the group and the three firms could have settled all the amounts due to banks. However now that stage appears to have passed. He concluded by requesting the bank to be fair and support my efforts to make good all the amounts that are found due by my group to all banks. Owning up everything he said the bank has wrongly named his brother who is not at all concerned with the operations of the three firms or other companies. My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank. Whatever may be the consequences I may face for my actions the haste was in my humble submission unwarranted Modi conludes and makes has requested the bank to permit payment of salaries to 2 200 employees from the balance lying in the current accounts.
NEW DELHI: Nirav Modi has hit back at Punjab National Bank saying its overzealousness has shut the doors on his ability to clear his dues which he claims are much lower than the Rs 11 400 crore that the bank has gone public with. In a letter Modi wrote to the bank s management on February 15/16 he pegged the amount his companies owe the bank at under Rs 5 000 crore. The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns. This thereby jeopardised our ability to discharge the dues of the group to the banks Modi who left the country along with his family in the first week of January wrote. In the anxiety to recover your dues immediately despite my offer (on February 13 a day before the public announcement and on February 15 ) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts he wrote. The letter also referred to the extended discussions between him his representatives and bank officials as well as his emails on February 13 and 15. PNB the country s second largest public sector bank on February 14 informed the stock exchanges that it had detected a Rs 11 400 crore fraud at Mumbai s Brady House branch and named the firms led by Nirav Modi and his uncle Mehul Choksi s Gitanjali Group . The bank has also filed criminal complaints with CBI and the ED both of which launched nationwide searches on dozens of offices and residences of the alleged fraudsters. The bank has named Nirav Modi s brother his wife Ami an American national and uncle besides some others in the FIR. On the size of the fraud claimed by PNB in the FIR Modi said As you are aware this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. Even after your complaint was filed in good faith I wrote to you saying please sell/allow me to sell Firestar Group or their valuable assets and recover the dues not just from Firestar Group but also from the three firms. Valuing his domestic business at around Rs 6 500 crore he wrote This could have helped reduce/discharge the debt to the banking system but quickly added that this was no longer possible as all his bank accounts had been frozen and assets sealed or seized. He said PNB had time and again acknowledged that the buyers credit facility has been extended by it to the three partnership firms since several years; that there has been no default on the part of any of these firms over all these years; that money has gone through PNB over all these years for the repayments of the advances given by the overseas bank branches under the buyers credit That Firestar International and Firestar Diamond International have never been in default to any bank and the bankers are fully secured. He stated that PNB has over the years been earning bank charges to the tune of crores of rupees on the buyers credit facility extended by it to the three partnership firms and that PNB had extended the money to the firm s buyers as well from where also it had been receiving full payments with interest and on time all these years. On the valuables worth Rs 5 649 crore that CB and ED searches had yielded he wrote These and other assets of the group and the three firms could have settled all the amounts due to banks. However now that stage appears to have passed. He concluded by requesting the bank to be fair and support my efforts to make good all the amounts that are found due by my group to all banks. He said the bank had wrongly named his brother who was not at all concerned with the operations of the three firms or any other. My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank. Whatever may be the consequences I may face for my actions the haste was in my humble submission unwarranted Modi wrote requesting the bank to permit payment of salaries to 2 200 employees from the balance lying in the current accounts.
Written by Muthupandi Ganesan Manuraj Shunmugasundaram | Updated: February 20 2018 8:41 am The PNB branch in Fort Mumbai from where Rs 11.300 crore fraud has been spotted. (Express photo by Ganesh Shirsekar) The breathtaking scale of the Punjab National Bank (PNB) fraud allegedly involving Nirav Modi and his associates has shaken the public confidence in national banks. It is astonishing that the fraud was perpetuated over so many years especially in the age of public accountability preventive vigilance and stringent know-your-customer (KYC) norms both nationally and internationally. The pre-eminent question before every media outlet and some government agencies is the exact whereabouts of the suspected persons who had left India more than a month ago. However some media reports have focussed on the raids by the Directorate of Enforcement on properties held by the accused in Mumbai Surat and New Delhi which have led to the seizure of some assets. Practically speaking this aspect of asset recovery is far more important currently than either finding or arresting Nirav Modi and the other accused. From the First Information Report (FIR) filed by PNB it is apparent that a substantial amount of money has been lent by Indian banks abroad. Relying on the unauthorised letters of undertaking (LOU) provided by the PNB Allahabad Bank and Axis Bank based in Hong Kong have lent money to Nirav Modi via his three firms Diamond R Us Solar Exports and Stellar Diamonds . It seems the government agencies have so far followed a typical operating procedure in initiating the process to suspend the passports of the main accused and getting attachments orders of their assets in India estimated to be around Rs 5 100 crore. But according to recent reports the alleged magnitude of the overall PNB fraud is claimed to be in the vicinity of Rs 22 000 crore which is four times the value of what has been attached by authorities within India. Therefore it is of paramount importance that the Government of India acts swiftly to freeze and recover all the overseas assets of the accused persons. Nirav Modi has luxury branded jewellery stores across the world in diverse jurisdictions such as London New York Beijing Macau Singapore and Malaysia. In a case of this nature it is imperative that Government of India and the PNB utilise every possible legal resources to immediately freeze these overseas assets pending the outcome of the criminal investigation. India must learn from the Vijay Mallya case that seeking extradition of a suspect under a criminal cooperation procedure between countries will not automatically lead to the recovery of monies lost by the public. In any event the Government of India has a woeful record of extraditing suspects from the UK. Recently its request to extradite the UK-based bookie Sanjeev Chawala for match-fixing charges involving Hansie Cronje during the South Africa cricket tour to India in 2000 was refused by the jurisdictional court on the basis of poor state of prisons in India which would be contrary to his human rights. As such India faces an uphill task in ensuring that Vijaya Mallya returns to India in the extradition proceedings. Therefore the Government of India must focus its limited resources and legal acumen on freezing the proceeds of this crime wherever they may be located by devising a coordinated multinational prosecution strategy to freeze Nirav Modi s assets. Many foreign jurisdictions have well developed legal mechanisms to assist victims of fraud by granting freezing injunctions known as Mareva injunctions . In London the high court routinely grants freezing injunctions using its power to preserve and protect the assets derived from fraudulent transactions. Freezing Order is a well-known legal remedy which can be obtained quickly and without notice to the suspects. Recently the London High Court has become even more victim-friendly in making an order freezing assets of not only people known to have been involved in a fraud but also persons unknown . This means that the court s order automatically extends to people who may have been involved in a fraud and freezes their assets. This is a landmark asset protection order which will assist in cases such as the PNB fraud. In a case of this nature with the public confidence on national banks at stake it is imperative that the PNB and Government of India start going after assets of the accused anywhere in the world. The Finance Bill 2018 which is yet to passed contains amendments to the definition of proceeds of crime under the Prevention of Money Laundering Act 2002. This allows the recovery of assets located outside India. But the lessons learnt from previous failed extradition efforts must be taken into account and timely action is the need of the hour. Only a dedicated strategy to recover international stolen assets would ultimately deliver timely justice to the public purse in India. Ganesan is Barrister-at-Law London and Shunmugasundaram is spokerperson DMK and advocate in Chennai For all the latest Opinion News download Indian Express App More From Muthupandi Ganesan When the seas part India needs to build legal expertise to press its case in international maritime disputes.. Protect the witness The Swathi murder case in Chennai must trigger a move to enact strong witness protection laws and schemes... Tags: Nirav Modi PNB Socrates SantosFeb 20 2018 at 8:35 amSorry to disagree a little. Catching and punishing those responsible for the utter disregard to the control processes is EQUALLY important. People in authority must have this ingrained in their mind that there WILL definitely be consequences to their actions of irresponsibility - either corruption or unconcerned chalta hai ati_tude. Harsh may it sound a military-style accountability is the order of the day.(0)(0) Reply BBAWAJIFeb 20 2018 at 6:28 amWhat the honorable gentlemen say is true to some extent but the guilty must be brought to book. BOTH RECOVERY PUNISHMENT of the guilty is important. If the guilty are in Jail then they cannot use their ill gotten gains and recovery would be a lot easier One simply cannot attach more importance to one than the other. In India the records of punishing the guilty especially the businessmen netas babus is abysmal and down right pathetic. No one can do this without the system and its minders turning a blind eye. In fact all involved the perpetrators the people empowered to keep vigil the CEO s the employees who say they followed orders when they know those orders were wrong and the b ambassadors must be brought to book. All in a direct or indirect way are involved(0)(0) Reply
Mumbai: HighlightsNirav Modi writes a letter to PNB on 15/16 February: PTI In letter he says erroneously cited liability resulted in media frenzy Actions destroyed my brand restricted your ability to recover all dues Celebrity jeweller Nirav Modi the alleged kingpin of the largest banking scam in the country s history has said PNB s overzealousness shut the doors on his ability to clear the dues in a letter to the Punjab National Bank s management.Mr Modi also said the dues were much less than what the bank has claimed and that his relatives booked in the cases filed by the central agencies had nothing to do with the operations of the firms under their scanner.In a letter Mr Modi wrote on February 15/16 to the Punjab National Bank management a copy of which PTI has seen he pegged the money his companies owe to the bank under Rs 5 000 crore. The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns he wrote in the letter. This thereby jeopardised our ability to discharge the dues of the group to the banks Mr Modi wrote in the letter. In the anxiety to recover your dues immediately despite my offer (on February 13 a day before the public announcement and on 15) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts he said.The letter also refers to the extended discussions between him and between his representatives and the bank officers besides his emails of February 13 and 15 2018.Nirav Modi left the country along with his family in the first week of January before the alleged scam became public.The PNB the second largest state-run bank had on February 14 informed the exchanges about detecting a 1.77 billion fraud at its Brady House branch in Mumbai and named the firms led by Mr Modi and his uncle Mehul Choksi s Gitanjali Group and some other diamond and jewellery merchants as suspects.Central government agencies the CBI and the Enforcement Directorate have registered cases on the complaint by the bank and launched nationwide searches on dozens of offices and residences of the alleged fraudsters. The bank has named Nirav Modi s brother his American wife Ami and uncle Mehul Choksi besides some others in the FIR.On the over Rs 11 000-crore loss claimed by the PNB in the FIR Mr Modi said As you are aware this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. He said that even after PNB s complaint was filed he wrote to them in good faith asking them to sell or allow him to sell Firestar Group or their valuable assets and recover the dues not just from Firestar Group but also from the three firms. Valuing his domestic business at around Rs 6 500 crore he said This could have helped reduce/discharge the debt to the banking system but added that this is not possible as all his bank accounts have been frozen and assets sealed or seized.He went on to state that PNB had time and again acknowledged that the buyers credit facility has been extended by it to the three partnership firms for several years and that there has been no default on the part of any of these firms over all these years. He said that money went through PNB all these years for the repayments of the advances given by the overseas bank branches under the buyers credit. That Firestar International and Firestar Diamond International have never been in default to any bank and the bankers are fully secured . He also said that PNB has over the years been earning bank charges to the tune of crores of rupees on the buyers credit facility extended by PNB to the three partnership firms and that PNB has extended the money to the firm s buyers as well from where also it has been receiving full payments with interest and on time all these years.On the valuables that CBI and ED searches yielded Rs 5 649 crore he said These and other assets of the group and the three firms could have settled all the amounts due to banks. However now that stage appears to have passed. He concluded by requesting the bank to be fair and support my efforts to make good all the amounts that are found due by my group to all banks. CommentsClose X Owning up everything he said the bank has wrongly named his brother who is not at all concerned with the operations of the three firms or other companies. My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank. Whatever may be the consequences I may face for my actions the haste was in my humble submission unwarranted Mr Modi concluded and requested the bank to permit him to pay the salaries to 2 200 employees from the balance lying in the current accounts of his firms.
NEW DELHI: The Income Tax department has found that in the last financial year the Nirav Modi group had illegally diverted Rs 1 216 crore of diamonds meant for export from its special economic zone to the domestic market selling them in cash. The Director-General of Income Tax (Investigations) had found that in 2016-17 the group which had units at the Surat SEZ diverted high quality diamonds imported for processing and export to the domestic market for huge profit. Instead low-quality diamonds were exported to associate units abroad to keep up the appearances. Learning with the Times: Why extraditing Nirav Modi may not be so difficultA request for extradition can be made whenever a person s conduct in India or in a foreign state corresponds to any in the list of extraditable offences and is punishable with a minimum of one year jail term. Nirav Modi and his uncle Mehul Choksi along with directors of the Modi and Gitanjali groups are under investigation by the Central Bureau of Investigation and the Enforcement Department for allegedly committing fraud amounting to Rs 11 300 crore against Punjab National Bank whose Letters of Undertaking and Foreign Letters of Credit were illegally used to raise and rollover money. Both Modi and Choksi along with other family members left the country in January this year. PNB fraud: All that has happened so farOn Valentine s Day one of India s biggest banks disclosed a 1.77 billion fraud allegedly by one of the country s richest men who deals in pearls and diamonds. Shares of the lender Punjab National Bank (PNB) plunged on the news dragging down other lenders when it said the scam may extend to multiple banks. The DGIT (Inv) also found in its probe that the group had claimed deduction on 100 per cent of the profits from exporting diamond as allowed under section 10AA of the Income Tax Act for the SEZ. It had claimed deductions to the tune of hundreds of crores in last six years the report by DGIT (Inv) said. The assessee has not been able to explain the reason for the drastic difference in valuation satisfactorily the investigative wing of the Central Board of Direct Tax said in its report. It also said that availing of deduction under 10AA was wrong. The difference in stock valuation of SEZ units has been worked out to the tune of Rs 1 216.31 crore in financial year 2016-17 which represents the unaccounted sale of imported diamonds diverted to domestic markets the report said. The DGIT (Inv) raided Nirav Modi s premises and offices in Surat s SEZ in January 2017.
NEW DELHI: The Indian tax authorities have written to counterparts in Jersey the Bahamas Cyprus Singapore and Mauritius seeking details of jeweller Nirav Modi s accounts and certain entities linked to him said senior officials. Modi his uncle Mehul Choksi and their companies are accused of defrauding Punjab National Bank through letters of undertaking (LoUs) and other instruments. The entities cited above were used to direct funds to Indian companies. Tax authorities suspect the money may have been roundtripped via some of the tax havens through a clutch of trusts and other entities. We have sought more details information... Fresh references have been sent out said a senior income tax department official. The department has sought details on transactions linked to the entities after it found some shell companies overseas had been used to send funds. Modi is said to have been a settlor and beneficiary of a trust Monte Cristo in Jersey. The underlying company of this trust Monte Cristo Ventures Ltd was incorporated in the Bahamas with UBS AG Singapore. Modi group company Firestar International received funds from Mauritius-based entities Jade Bridge Holdings and Forcom Worldwide in the form of share capital and high share premiums. This had not been disclosed under the Undisclosed Foreign Income and Assets and Imposition of Tax Act 2015 which afforded Indian residents a last opportunity to declare overseas assets as part of the government s campaign to root out black money. Besides Modi group company Firestar International received funds from Mauritius-based entities Jade Bridge Holdings and Forcom Worldwide in the form of share capital and high share premiums said the official. This company also received funds from another Singapore-based company Islington International Holding Pte Ltd the beneficial owner of which was Modi s sister Purvi Mehta. Modi had received Rs 284 crore in March 2013 and April 2014 from Mauritius-based companies and Rs 271 crore from a Singaporebased entity. The department has already issued a notice to Modi under the stringent black money law for nondisclosure of assets. Information from the jurisdictions cited above will help establish the source of funds officials said.
Yoga guru Baba Ramdev on Monday said that Prime Minister Narendra Modi will show jeweller Nirav Modi his right place . Modi government will put Nirav Modi in his right place . He will face the consequences for the sins he has committed Ramdev said here. Addressing the media the yoga guru said whether its Lalit Modi or Nirav Modi whosoever is doing this shameful act he is insulting the nation. Whether it s Lalit Modi or Nirav Modi whoever does this kind of shameful thing that in itself is a disgrace to the country. People put a bad name to the country by doing such kind of scams Ramdev added. The PNB has lodged two financial fraud complaints of Rs. 11400 crore and Rs 280 crore against Nirav Modi his family members and Mehul Choksi owner of Gitanjali Gems. The Central Bureau of Investigation (CBI) has filed a formal case charging four- Nirav Modi his wife Ami brother Nishal and Mehul Choksi- on January 31 over Rs. 280 crore fraud. The agency has filed the case under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR registered by the Central Bureau of Investigation (CBI). The PNB detected the scam in which jeweller Nirav Modi acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders. The scam started in 2011 and was detected in the third week of January this year after which the PNB officials filed a complaint with the CBI on January 31.
The speaker of the Chhattisgarh Legislative Assembly suspended 29 Congress MLAs on Monday after they created an uproar alleging that the state government had invited a company associated with businessman Nirav Modi to invest in the state. Nirav Modi a billionaire jeweller is at the centre of a Rs 11 380-crore scam at the Punjab National Bank.The Congress MLAs also demanded the resignation of Chief Minister Raman Singh (pictured above) PTI reported. They alleged that Singh and his officials during a visit to Australia in January had invited Australian mining major Rio Tinto for mining exploration in Chhattisgarh. Modi s company Firestone Diamond had partnered with Rio Tinto in 2010 to sell pink diamonds http://univer.tneu.edu.ua/user/kkabhibus/ in India.The legislators accused the Bharatiya Janata Party of looting the state in the name of industrial investments and sought a discussion on it but Speaker Gaurishankar Agrawal rejected the demand. The Congress MLAs then shouted slogans after which the House was adjourned for five minutes.After the proceedings resumed and the speaker ignored the MLAs slogans they went to the well of the House and were then suspended.Later Raman Singh said the charges were baseless and hypothetical .30 Congress MLAs suspended from Chhattisgarh Assembly after they raised protest over CM Raman Singh s invitation to Metals & Mining Corporation Rio Tinto for investment in the state alleging that the corporation has connections with #NiravModi & is black listed in Madhya Pradesh ANI (@ANI) February 19 2018