Despite PNB FIR, Nirav Modi's brother got $350,000 from SBI, says TV report

Accused in the Rs 127-billion Punjab National Bank (PNB) fraud, Nirav Modi might breathe easy as the Delhi High Court on Wednesday called the case against the absconding diamantaire "sketchy". The court also issued a notice to the Enforcement Directorate (ED) on a plea filed by Modi. 

The Delhi High Court Judge said, "... Want to wait to see what the ED has to say because Vijay Aggarwal (Nirav Modi's lawyer) himself doesn't seem to be too sure of the facts of the case." 

Meanwhile, Nirav Modi wants the ED action of seizing his property and depositing it with the PNB quashed. 

Alarmingly, the extent of the unravelling fraud at PNB could rise beyond the nearly $2-billion mark so far outlined by the state-owned lender.

Modi, his uncle Mehul Choksi, and others are being investigated by multiple probe agencies after the scam recently came to light following a complaint by the PNB that they had allegedly cheated the nationalised bank, with the purported involvement of a few bank employees. The ED has registered a money laundering case against Nirav Modi, his firms, and others on the basis of a Central Bureau of Investigation (CBI) first information report (FIR). 

The CBI and the ED have registered FIRs to probe the case and intensified the crackdown on Modi and Choksi.    

Here are the top 10 developments surrounding the PNB fraud allegedly perpetrated by Nirav Modi and Mehul Choksi

1) According to TV reports, despite PNB FIR, Nirav Modi's brother got $350,000 from State Bank of India (SBI). If reports are to be believed, the important question that arises is - How was Nirav Modi’s State Bank of India account in Antwerp still active 28 days after his Rs 130 billion default was discovered? 

2) PNB chief Sunil Mehta appears before SFIO

The Serious Fraud Investigation Office (SFIO) today questioned PNB managing director and CEO Sunil Mehta for five hours in connection with the Rs 126 bn fraud at the bank, allegedly carried out by diamond jewellers Nirav Modi and Mehul Choksi.

Mehta was seen entering the SFIO office here before 11 AM and leaving around 4 PM, presumably after recording his statement.

3) No visibility of dues recovery from Choksi, Nirav: ICICI, Axis officials

Top officials of ICICI and Axis banks have told an anti-fraud agency that recovery of loans worth Rs 10 billion seemed impossible from the Nirav Modi and Gitanjali Group of companies.

According to sources, ICICI Bank Executive Director N S Kannan and Axis Bank Deputy Managing Director V Srinivasan, who appeared before the Serious Frauds Investigation Office (SFIO) in Mumbai on Tuesday, told investigators that there was "no visible possibility" of recovering the money from the companies owned by fugitive jewellers Nirav Modi and Mehul Choksi.

4) Nirav Modi no more a part of Indian billionaires' club in Forbes list 2018

Nirav Modi is no longer a part of India's billionaires' club.

Modi, who had featured in Forbes' 2017 rich list with a fortune of $1.8 billion, could not make the cut in this year's rankings.

"Nirav Modi is among the drop-offs from this year's the list, along with Papa John's Pizza founder John Schnatter, Christoffel Wiese of South Africa, and Saudi Arabia's Prince Alwaleed Bin Talal Al Saud," Forbes said.

5) Delhi HC seeks ED's reply on plea of Nirav Modi's firm: The Delhi High Court on Wednesday sought a response from the Enforcement Directorate (ED) on a plea by Nirav Modi's firm Firestar Diamond against a money laundering case lodged by the probe agency in connection with the PNB fraud case. 

A Bench of Justices S Muralidhar and I S Mehta issued a notice to the ED on Firestar Diamond International Private Ltd's plea seeking direction to the agency to supply it several documents, including a copy of the search warrants. 

The Bench, however, refrained itself from staying the proceedings against the company, saying that it wanted to consider the "stay part" after the agency has filed its response.

It directed the ED to place before it the sequence in which it initiated proceedings in the matter. "The relevant records involved in the matter should be placed before the court on the next date of the hearing, March 19."

"The officer conversant with the present case should also remain present in the court to answer all queries," the bench said.

6) Nirav Modi's lawyer seeks quashing of ED action: Advocate Vijay Aggrawal, appearing for the Nirav Modi firm, sought the quashing of the ED action of taking away the movable property and depositing the same with the PNB bank.  

Further, he submitted before the Delhi court that the ED be directed to supply a copy of the Enforcement Case Information Report (ECIR) registered by it, pursuant to which the searches and seizures were conducted by the ED. 

Additional Solicitor General Sandeep Sethi and advocate Amit Mahajan, appearing for ED submitted that the firm's plea is premature and the challenge is misconceived.



7) Delhi High Court calls case 'sketchy': On Wednesday, the Delhi High Court called the case "sketchy". The Delhi High Court Judge said, "Want to wait to see what the ED has to say because Vijay Aggarwal (Nirav Modi's lawyer) himself doesn't seem to be too sure of the facts of the case." 

Further, the high court said that the exact amount involved in the case was not clear. 

"It's not clear under what authority the ED went to search the properties," the high court said.

According to Aggarwal, the court fixed the matter for further hearing at 2:15 pm on March 19.



8) Nirav Modi wants his seized property back: Absconding businessman Nirav Modi is not pleased with his assets being seized by the probe agency. According to earlier reports, probe agencies have seized his luxury cars and imported watches, among other property. 

In his plea, Nirav Modi said: "I can understand search, I can understand seizure. But they have taken away my properties and given them to PNB."

On March 6, Firestar Diamond International moved to the Delhi High court against the seizure of Modi's properties by the ED. The Nirav Modi-owned firm has sought to quash the order passed by the ED for the seizure of movable property. 

It also challenged the provisions of the Prevention of Money Laundering Act (PMLA) that allow the ED to conduct search and seizure of property.

Further, Firestar Diamond International's plea claimed that the central probe agency conducted its searches without following due process and giving a copy of the search warrant to the company officials. 

9) Fraud probe drove Modi's jewellery business to US bankruptcy filing: Nirav Modi's international jewellery business was driven toward US bankruptcy protection after authorities in India began seizing and freezing assets. 

On Tuesday, at a Manhattan federal bankruptcy court hearing, the company's attorney outlined that background. Nirav Modi, the chief executive officer of the parent company of the jeweller Firestar Diamond Inc, is under investigation for the alleged PNB fraud. While Firestar isn't linked to the complaints filed by authorities, the seizure of assets has still taken its toll.

"That had a dramatic and sudden impact on the operations of the US companies," said Ian Winters of Klestadt Winters Jureller Southard & Stevens LLP in the hearing on behalf of Firestar Diamond.

10) CBI arrests Gitanjali's VP Vipul Chitalia: On Tuesday, the CBI arrested Vipul Chitalia, the vice-president of the Gitanjali Group of Companies, in connection with the PNB scam. The probe agency claimed that Chitalia was a "mastermind" who reported directly to Mehul Choksi. 

Chitalia's was the 19th arrest in the case, the CBI said. 

In Mumbai, after he was detained at the airport and questioned by the agency, Chitalia was produced before a special CBI court in the afternoon. Judge S R Tamboli remanded him in CBI custody till March 17.

"Chitalia was instrumental in preparing applications for putting through the fraudulent transactions of the LoUs (Letters of Undertaking) and FLCs (Foreign Letters of Credit) with the active connivance of key accused Gokulnath Shetty," Special prosecutor A Limosin told the court. 

With agency inputs