The CBI has booked diamond merchant Nirav Modi, his brother, wife and a business partner for allegedly cheating the Punjab National Bank (PNB) of over Rs 280.70 crore, a report said.

There has always been a certain amount of mystery surrounding Modi’s sudden emergence into the industry and his brand’s prominence in India as well as abroad. Celebrities across the board are seen wearing his jewellery and he has flagship stores in some of the world’s biggest luxury capitals. Modi hails from a family of diamantaires himself – his dad migrated to Belgium to set up a trading unit and having seen the potential in India, Modi moved back to India to learn the ropes from his uncle, Mehul Choksi, Chairman, Gitanjali Group.

The CBI recently carried out searches at 21 locations, including the residence of Modi, his brother Nishal, wife Ami and Mehul Chinubhai Choksi, all partners of Diamond R US, Solar Exports and Stellar Diamonds and two bank officials Gokulnath Shetty (now retired) and Manoj Kharat, also named in the FIR, according to a report. 

The searched locations included the offices and SEZ units of these companies in Mumbai and Surat. A response to an email sent to www.niravmodi.com, seeking comments on the alleged cheating case, said, "This matter has no affiliation, legal or otherwise with Firestar International Limited which is the flagship enterprise of Mr Nirav Modi," according to sources. 

“The public servants committed abuse of official position to cause pecuniary advantage to Diamond R US, Solar Exports, Stellar Diamonds and a wrongful loss of Rs 280.70 crore to the Punjab National Bank during 2017," the FIR has alleged.

The bank has alleged in the complaint that a fraudulent issuance of Letters of Undertakings (LOU) took place on January 16, 2018 for and on behalf of the accused firms, which approached the bank and presented a set of import documents to the branch with a request to allow buyers' credit for making payment to overseas suppliers. The bank officials requested the firms to furnish 100 per cent cash margin for LoU for raising buyers' credit.

The bank claimed that its deputy manager (now retired), Gokul Nath Shetty, and Manoj Kharat had fraudulently issued the LoUs without following the prescribed procedure of obtaining request applications, documents and approval of authorities and without making any entries in the bank's systems.

The banks said they fraudulently issued eight LOUs totalling USD 4.42 crore, equivalent to Rs 280.70 crore, for Hong Kong-based branches of the Allahabad Bank and the Axis Bank. The bank alleged that it was making an "in depth" inquiry to find out outstanding LOUs which were not detected in its system.

"While tracing old entries, it transpired that buyer's credit based on fake LOUs might also have been paid through NOSTRO A/C," it alleged. Claiming that public money to the tune of Rs 280.70 crore seems to have been "embezzled" by committing fraud, the bank asked the CBI to register the case.

(source PTI)