Nirav Modi has refused to join PNB fraud investigation: CBI

Nirav Modi, now at an undisclosed foreign location, declined to follow CBI's directive to join the PNB fraud investigation, citing business commitments

Shaswati Das, Maulik Vyas
Updated1 Mar 2018
Billionaire jeweller Nirav Modi is at the centre of the $2 billion PNB fraud. Photo: Aniruddha Chowdhury/Mint
Billionaire jeweller Nirav Modi is at the centre of the $2 billion PNB fraud. Photo: Aniruddha Chowdhury/Mint

New Delhi/Mumbai: Jeweller Nirav Modi has refused to join India’s investigation into a $2 billion PNB fraud engineered by his companies, the Central Bureau of Investigation (CBI) said, in a pattern now familiar with India’s fugitive tycoons.

The CBI on Wednesday said Modi, now at an undisclosed foreign location, declined to follow the agency’s directive to join the PNB fraud investigation, citing business commitments. CBI said a similar directive will be issued to Mehul Choksi, Modi’s maternal uncle and head of the Gitanjali Group, also an accused in the Rs12,636 crore PNB fraud.

“On the official email address of Nirav Modi, we had asked him to join the investigation; he replied that he has businesses here (location not known) and he won’t be able to join. We have written back to him today (Wednesday) directing him to immediately contact the high commission/embassy of the country where he is staying, so that he can be brought to India immediately. He has been told that it is mandatory for the accused to join the investigation and he has been asked to come next week,” CBI spokesperson Abhishek Dayal said in New Delhi on Wednesday.

While Modi’s lawyer Vijay Aggarwal declined to comment, Choksi’s lawyer Sanjay Abbot told Mint that Choksi could not travel to India “since his passport had been revoked”.

Businessman Vijay Mallya who is facing various charges in India over large unpaid loans left for London before the noose tightened around him, and has not returned since despite government efforts. Cricket tycoon Lalit Modi too left India with the surfacing of various irregularities in the Indian Premier League he headed and has stayed out of the country since.

Nirav Modi is accused of securing unauthorised letters of undertaking (LoUs) from Punjab National Bank (PNB) to raise credit from foreign branches of Indian banks. On 14 February, PNB informed the stock exchanges that it had detected the fraud and filed a complaint.

On Wednesday evening, CBI arrested an internal chief auditor of PNB as part of the ongoing investigation against Nirav Modi group and the Gitanjali group.

“The arrested auditor M.K. Sharma, chief manager rank (Scale IV officer of PNB) was allegedly responsible for auditing the systems and practices of PNB, Brady House Branch and report the deficiencies to zonal audit office. The arrested accused will be produced tomorrow (Thursday) at the designated court in Mumbai,” a senior CBI official said on condition of anonymity.

PNB did not respond to Mint’s emails seeking a response.

On Tuesday, the Enforcement Directorate (ED) moved a special anti-money laundering court seeking a non-bailable warrant against Modi. The court has reserved its order for 3 March.

“The prime accused did not appear for the questioning despite three summons were issued to him on 15, 17 and 22 February, respectively,” the ED counsel argued in the special court on Wednesday. “We are also seeking letters rogatory (LR) to other seven countries including Malaysia, Armenia, France, China, Japan, Russia and Belgium.”

The letter rogatory is a request from the court of a sovereign country to a court of another sovereign country to obtain information about businesses and assets of a person in that country.

Vijay Aggarwal, counsel appearing for Modi argued that “We should get chance to be heard before the court issues a non-bailable warrant against Modi; otherwise, it will be a violation of the principle of natural justice.”

After hearing both sides, additional sessions judge M.S. Azmi reserved his order for 3 March.

Earlier on Monday, the enforcement agency had applied to the court to issue LR to Hong Kong, the US, UK, UAE, South Africa and Singapore in connection with the investigation.

“The PMLA special court is likely to issue an NBW against Nirav Modi as the matter is very serious and requires his physical presence for further investigation,” said Zulfiqar Memon, managing partner of Mumbai-based boutique white collar crime practice firm MZM Legal.

“His defence lawyers may intervene at this stage and oppose ED’s prayer for the issuance of NBW, but it looks difficult for the court to consider the defence’s plea. The big question is if Modi has a case, why is he not joining the investigation. However, the defence will have their reasons to counter that,” he added.

The Income Tax department on Wednesday also issued lookout circulars against Nirav Modi and Mehul Choksi, while also attaching four more properties belonging to Modi.

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