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Five things you need to know about Nirav Modi and PNB fraud

International Business Times (IN) logo International Business Times (IN) 15-02-2018 Aastha Agnihotri

State-owned lender Punjab National Bank (PNB) is embroiled in a Rs 11,400 crore fraudulent transactions that are allegedly linked to designer and jeweler Nirav Modi.

Here's all you need to know about the man at the centre of PNB fraud:

Who is Nirav Modi?

Indian-born diamond jewellery designer Nirav Modi is the founder of the $2.3 billion Firestar Diamond and was ranked #57 in the Forbes list of India's billionaires in 2017.

Modi grew up in Belgium, dropped out of Wharton and moved to India where he got trained in the diamond trade under his uncle, according to Forbes.

Complete coverage on PNB fraud

He went on to launch his own Nirav Modi brand with 16 stores in locations such as Delhi, Mumbai, New York, Hong Kong, London and Macau.

Is he a global brand?

Well, certainly he is. His pieces have adorned global icons such as Dakota Johnson, Andreea Diaconu, Rosie Huntington-Whiteley or even PeeCee, among others. Actor Priyanka Chopra is the brand ambassador.

Modi has roped in big industry names to run his business. Angelina Ypma, who is the global president at Nirav Modi, once worked for Bulgari and Cartier, while CFO Vipul Ambani earlier worked at institutional brokerage firm Tower Capital where he was a senior executive.

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How he got involved in the PNB fraud?

The fraud unfolded after Nirav Modi's companies sought a fresh loan last month. The officials who had helped them earlier had retired.

When the bank insisted on guarantees to issue letter of undertakings, the Modi companies allegedly said they had used the facility before. That's when the bank started investigating.

a group of people posing for the camera: Nirav Modi © (Photo by Jamie McCarthy/Getty Images) Nirav Modi

How big is the fraud?

Two complaints have already been filed against Modi for alleging fraud worth Rs 11,400 crore by the Central Bureau of Investigation, news agency Press Trust of India reported citing sources.

This is in addition to the Rs 280 crore fraud case that he is already under investigation for, again filed by PNB.

What's next?

The fraud opened a can of worms that could impact the entire banking industry.

PNB, in its statement on Wednesday, said that based on the fraudulent transactions, other banks appear to have advanced money to the customers abroad. Anything that happens now will be based on the law and genuineness of underlying transactions.

This comes at a time when Indian banks are already reeling under bad loans.

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