Bil­lion­aire jew­eller un­der lens as PNB jolted by 11,300 crore fraud

Scam On Since 2011; CBI & ED Launch Probe

The Times of India (New Delhi edition) - - FRONT PAGE - NEWS NET­WORK

In one of the big­gest fraud cases to hit In­dian bank­ing, Pun­jab Na­tional Bank (PNB) in­formed stock ex­changes on Wed­nes­day that it has been hit by em­bez­zle­ment amount­ing to Rs 11,300 crore at one of its branches in Mum­bai.

Although the bank did not name any per­son or com­pany,

FULL COV­ER­AGE: P 14 & 21

it had lodged a com­plaint with CBI on Jan­uary 31 nam­ing bil­lion­aire di­a­mond mer­chant Ni­rav Modi and a few oth­ers in a Rs 280-crore fraud. The com­plaint also men­tioned his wife Ami Modi, his brother Nishal Modi and his un­cle Mehul Choksi, MD of Gi­tan­jali Gems — a listed com­pany.

Two PNB of­fi­cials, Gokul­nath Shetty and Manoj Kharat, were also named.

The Modis and Choksi are part­ners in three busi­nesses — Di­a­monds R US, So­lar Ex­ports and Stel­lar Di­a­monds.

The En­force­ment Directo- rate has also ini­ti­ated a money laun­der­ing case against the Modis, agen­cies had re­ported on Wed­nes­day.

The news sent PNB stocks tum­bling nearly 10% lower on the Bombay Stock Ex­change.

The fraud is worth al­most eight times the bank’s 2016-17 profit and nearly a third of its mar­ket cap on Wed­nes­day’s clos­ing price.

In a mat­ter of a few days, the scale of the fraud has grown from Rs 280 crore to over Rs 11,300 crore.

Hail­ing from a fam­ily of An­twerp-based di­a­mond bro­kers, Ni­rav Modi, 48, was sent as a19-year-old to Mum­bai to learn the ropes of the trade from his ma­ter­nal un­cle, Mehul Choksi. De­spite a late en­try into the re­tail busi­ness in 2010, he quickly gained a rep­u­ta­tion as In­dia’s jew­eller to the stars as Hol­ly­wood A-lis­ters like Kate Winslet and Taraji P Hen­son walked the red car­pet in di­a­monds from his epony­mous brand. By 2013, he was in Forbes’ bil­lion­aires list.

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