Jeweller denies huge bank fraud role
NEW DELHI/MUMBAI: Indian billionaire jeweller Nirav Modi, one of the prime accused in the country’s largest ever bank fraud, denies allegations levelled against him by Punjab National Bank (PNB), his lawyer said yesterday.
‘‘There is nothing, there is nothing in it,’’ Vijay Aggarwal, a lawyer representing Modi, said, referring to the police complaint filed by PNB that alleges that companies linked to Modi and one of his relatives received credit worth nearly $US1.8 billion ($NZ2.45 billion) between 2011 and 2017 using false guarantees supplied by two bank officials.
Aggarwal, speaking by telephone, declined to comment on where Modi was. Indian officials are on the lookout for Modi and his family, who police say left India in January before the case was filed.
‘‘Everything is documented,’’ Aggarwal said of Modi’s dealings with PNB, adding that the stateowned bank had regularly levied fees on its dealings with the jeweller’s firms.
Asked about his legal strategy, Aggarwal said: ‘‘Until there is no charge sheet, there is no strategy. When there is a charge sheet, there will be a strategy.’’
According to a police complaint by PNB, the two officials at a Mumbai branch of the bank steered fraudulent loans to companies linked to Modi and entities tied to jewellery retailer Gitanjali Gems, which is led by Modi’s uncle, Mehul Choksi.
‘‘They are covering themselves up,’’ Aggarwal said of the complaint. ‘‘They want to avoid liability . . . that is why they are cooking up this story.’’
Choksi, who has also left the country, has not commented. Gitanjali, in a stock exchange filing, has denied Choksi’s involvement in the alleged fraud.
Five bank officials, including the two at the Mumbai branch, have been arrested.
The fraud case has stunned financial markets and sent PNB shares tumbling for a fifth day.
Shares in PNB, which has shed nearly a third of its market value since disclosing the fraud, were down 3.5% in early trading after rating agency Fitch placed the bank on negative watch. Later, Moody’s put the bank’s ratings on a downgrade review.
In a letter to PNB officials, Modi said his companies owe the bank less than $US775.25 million, much lower than alleged by the bank. He said PNB has jeopardised its chances of recovering the sums owed by going public.
‘‘The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be goingconcerns,’’ he wrote in a letter. ‘‘This thereby jeopardised our ability to discharge the dues of the group to the banks.’’ Both companies are controlled by Modi. The fraud allegedly involves at least three firms controlled by Modi and others by Choksi. — Reuters