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What is the PNB fraud case against Nirav Modi and will the fugitive finally be forced to return home?

Firstpost logo Firstpost 09-11-2022 FP Explainers

Fugitive diamond billionaire Nirav Modi’s appeal against extradition to India has been turned down by the High Court in London today (9 November).

The celebrity diamond merchant, accused in the Rs 13,758-crore Punjab National Bank (PNB) fraud case, will face money laundering charges in India whenever he is brought back.

The High Court rejected Modi’s request to block his extradition on the grounds of mental health and said his risk of suicide is not such that it would be “either unjust or oppressive to extradite him”, reports PTI.

As per Reuters, a two-judge panel comprising Lord Justice Jeremy Stuart-Smith and Justice Robert Jay said in the verdict that the 51-year-old businessman could be kept safe at Arthur Road jail in Mumbai, where he will be detained once he comes back to India.

Who is Nirav Modi and what is the PNB scam? What next for the diamantaire? Let’s take a closer look.

Who is Nirav Modi?

Born in Gujarat’s Palanpur, Nirav Modi is a luxury diamond jeweller and designer with his retail business spanning across the world in cities such as Delhi, Mumbai, New York, London, Hong Kong and Macau.

He grew up in Belgium and later went to US’ Wharton School at the University of Pennsylvania. However, he dropped out and shifted to India to get training in the diamond trade.

Business Standard reports that Nirav was only 19 when he and his father Deepak Modi came to Mumbai to work in the former’s maternal uncle Mehul Choksi’s business, who headed the  Gitanjali Group, one of the largest branded jewellery retailers.

nirav modi © Provided by Firstpost nirav modi

Later in his life, Modi launched the Nirav Modi jewellery brand which is known to have rich clientele in the international market.

In 2004, Modi founded Firestar International, trading in the highest quality diamonds. As per India Today, Choksi became a partner and the company apparently had a net worth of $2.3 billion.

Modi was one of the youngest Indians to be named in the Forbes Billionaires List 2017.

Big celebrities including Kate Winslet and Priyanka Chopra have once flaunted diamonds by Nirav Modi.

The inauguration of Modi’s first store on New York’s Madison Avenue in 2015 was attended by Donald Trump.

The case against Nirav Modi

The Punjab National Bank fraud case had come to light in 2018. The diamantaire along with his uncle had fled the country in early January of that year, weeks before the PNB bank filed a police complaint against Modi, Choksi and others alleging fraud to the tune of USD 2 billion.

On 5 February 2018, the Central Bureau of Investigation (CBI) launched an investigation into the alleged scam, and by 16 February the Enforcement Directorate (ED) had seized a cumulative Rs 56.74 billion worth of diamonds, gold and jewellery from Modi’s residence and offices.

The PNB bank has alleged fake Letters of Undertakings (LoUs) were obtained to draw money from overseas branches of Indian banks on behalf of Indian banks connected to Modi and the Gitanjali Group, as per Moneycontrol.

The billionaire diamond trader had received the first fraudulent guarantee from PNB on 10 March 2011 and then got 1,212 more such guarantees in the next 74 months, reports Business Standard.

The ED recovered bank token devices of the foreign “dummy companies” used by Modi to transfer fraudulent funds.

Out of Rs 6,519 crore outstanding fraudulent LoUs, the central agency alleged Modi had diverted over Rs 4,000 crore to his companies, through 15 “dummy firms” based in the UAE and Hong Kong.

One of the biggest frauds in India’s banking history, the PNB scam is worth over Rs 11,000 crore.

In May 2018, the CBI and ED had registered FIRs against the fugitive diamond merchant, and in March 2019, he was arrested in central London by UK authorities. He has been imprisoned in Wandsworth Prison in south-west London since his arrest in 2019.

According to Indian Express, the transcripts of Nirav Modi’s conversations submitted by the ED to a UK court show that he allegedly tampered with evidence and intimidated witnesses during investigations in India.

Besides fraud and money laundering, Modi is also facing charges of “causing the disappearance of evidence” and intimidating witnesses or “criminal intimidation to cause death” in India.

UK court earlier allowed Nirav Modi’s extradition

In February 2021, the Westminster Magistrates’ Court had allowed fugitive economic offender Modi’s extradition to India.

Nirav Modi © Provided by Firstpost Nirav Modi

The extradition was approved by the UK government on 15 April last year.

“On 25 February, the District Judge gave judgment in the extradition case of Nirav Modi. The extradition order was signed on 15 April,” a UK home office spokesperson had said.

In May 2021, Modi approached the UK High Court against the order.

What next for Nirav Modi?

If Nirav Modi will be extradited to India after today’s ruling remains to be seen.

After losing the appeal at High Court, Modi still has options to block his extradition.

He can approach Britain’s Supreme Court on a “point of law of public importance, to be applied for to the Supreme Court against the High Court’s decision within 14 days of a High Court verdict,” as per PTI.

“However, this involves a high threshold as appeals to the Supreme Court can only be made if the High Court has certified that the case involves a point of law of general public importance,” the news agency further mentioned.

After he has tried all his options, he can seek Rule 39 injunction from the European Court of Human Rights (ECHR). Thus, it is a long way before Modi can be sent behind bars in Mumbai’s Arthur Road Jail.

The diamantaire’s legal team is yet to comment on the verdict.

With inputs from agencies

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