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Nirav Modi, India's jeweller to Hollywood stars, now accused of massive bank fraud


By Rajendra Jadhav, Rupam Jain and Tom Lasseter

MUMBAI/(Reuters) - Nirav Modi's name is a stamp of corporate India's growing global prestige. On Hollywood red carpets, his diamonds have sparkled on the necklines and dangled from the earlobes of actors and models like Kate Winslet, and

Back in India, billboards above the traffic jams of bear the image of Priyanka Chopra, a Bollywood star and former Miss World who is fast becoming a household name in the United States, also draped in Modi's jewels.

But on Thursday, officials at the nation's federal investigative agency announced it was looking for as law enforcement officials fanned out to raid his jewellery stores and other businesses in and

(CBI) officials told reporters the agency had on Feb. 4 issued a lookout circular in the country for Modi, who they say had left four weeks earlier.

has not yet responded to the allegations and could not be reached for comment. His flagship company, Firestar Diamond, has said it had no involvement in the case.

The setback in Modi's climb to fame and fortune was abrupt, even by the rough-and-tumble standards of one of the world's fastest growing major economies.

During an interview with in November, - net worth of some $1.8 billion according to magazine rankings, and famously soft-spoken - discussed his love for art, poetry and paintings. He spoke, too, of his wife and three children with whom he lives in central

Asked how he planned to raise funds to add new stores, he seemed unconcerned.

"All options are open," he said, sitting in his cavernous office. "We could use internal accruals. We can take loans from banks or we could do an initial public offering."

But last month, India's second-largest filed a criminal complaint with the CBI that accused and others of defrauding the and causing it a loss of 2.8 billion rupees ($43.8 million).

Then on Thursday, the same bank, Punjab National Bank, publicly alleged that was involved with a much larger fraud case: $1.77 billion from a single branch stretching back to 2011.


The was a shock for the circles in which moved.

As recently as last month, he was at the in Indian media carried a group photograph with in the foreground and Nirav Modi, who is no relation, grinning between rows of Indian business leaders behind him.

"Top industrialists invited him home to display his collections," said a at a U.S.-based firm who has worked directly with Modi's company. "There was a personal touch in everything he sold. is a brand."

A senior member at Bharat Diamond Bourse, a Mumbai-based industry body with more than 13,000 members, sketched a similar profile of

"In one of the industry meetings in 2013 he said that when people wear a Cartier ring they don't say it's a diamond ring, they say it's Cartier," said the member, who did not want to be named. "He always wanted people to say they are 'wearing Nirav Modi'."

grew up in Antwerp, Belgium, in a diamond-dealing family. At the age of 19 he moved to in 1990, according to the November interview.

Nine years later, started his own company, Firestar Diamond Ltd., selling loose stones. He employed fewer than a dozen people at the time - by last year the number was more than 2,000.

He said he came to realize the margins were better in

Firestar Group, the parent company controls as a majority shareholder, saw its revenue grow over three years from 103 billion rupees (about $1.6 billion at current rates) to some 147 billion rupees ($2.3 billion) by the 2016-17 fiscal year, according to figures previously provided by the company.

In 2010, launched an eponymous jewellery business branded NIRAV MODI, in capitals, with the tagline "Haut Diamantaire". New boutiques in and have since been added to a stable that stretches from to to

He became a man whose diamond necklaces were sold, with his name attached, by Sotheby's: "pure feminine elegance," says a Hong Kong auction catalogue note of one 85.33 carat diamond necklace.

The auction house posted an of jewellery-on-stars at and highlighted supermodel Karlie Kloss having "a major moment with her diamond 'Mughal' choker."

(Reporting by Rajendra Jadhav, and Tom Lasseter; Additional reporting by and in New Delhi; Writing by Tom Lasseter; Editing by Alex Richardson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 15 2018. 20:52 IST