Diamond king on run from authorities is free to walk our streets
The Nirav Modi who in October 2016 opened his jewellery store in London’s Old Bond Street in what appeared, at the time, to be the latest step in a rapid and seemingly inexorable rise to the summit of the luxury goods market, struck an assured and self-confident figure. Standing beside the actress and model Rosie Huntington-whiteley, the “face” of the Modi brand, he smiled for the assembled photographers, as members of the press and guests moved among the display cases, champagne glasses in hand, admiring Modi’s collections of diamond necklaces, bracelets and earrings, some bearing price tags up to £300,000.
The Nirav Modi who on Thursday emerged from an office building in Soho seemed a very different person. Plumper, visibly aged, now sporting a handlebar moustache, looking startled to be recognised and replying to questions only with a terse “no comment”.
The revelation of Mr Modi’s whereabouts, and the fact that he is involved in a diamond business in London, comes 15 months after he fled India, accused of having embezzled £1.5billion from the Punjab National Bank (PNB). It is alleged that Mr Modi and others, acting in connivance with junior bank officials, had fraudulently acquired PNB guarantees without approval, which it’s said they later used to obtain loans from overseas branches of Indian banks.
Since fleeing from India, Mr Modi has been living in a luxury London apartment while deliberations go on between the Indian and British governments about his whereabouts and status.
In February last year an Indian court issued warrants in that jurisdiction for Mr Modi and his uncle and business associate Mehul Choksi, and also approached Interpol for assistance in tracking down Mr Modi and his family. He is now on a so-called red notice that lists a string of charges that includes “criminal conspiracy … and dishonestly inducing delivery of property … and money laundering”. At the same time, Indian authorities cancelled his passport, froze his Indian bank accounts, shut down his Indian shops, seized £612m worth of diamonds and jewellery from his properties and impounded cars, including a Rolls-royce and a Porsche.
Mr Modi was initially reported variously to be in New York and Hong Kong, before arriving in London in January, where he was said to be seeking asylum for “political persecution”.
The UK authorities were reportedly informed in February by the Indian government that Mr Modi’s passport had been revoked, and confirmed that he had entered the UK, but there was no record of him leaving the country since the revocation of the passport. It is known that before his passport was cancelled he had made trips to Zurich in Switzerland and Lanarka in Cyprus.
In June, Indian officials were reported to be “furious” that Mr Modi had also apparently been able to travel in and out of Britain at least four times, despite his Indian passport having been cancelled. The Home Office declined to comment to The Daily Telegraph on whether or not he had applied for asylum, or to confirm or deny reports that Britain had received a request from the Indian government to extradite him.
Having arrived in Britain, Mr Modi settled himself in an apartment in Centre Point, The Telegraph can now disclose, and wasted no time in carrying on with his business, opening a number of bank accounts, applying successfully for a National Insurance number and affiliating with a diamond trading company that was incorporated at Companies House in May 2018, described as a wholesale trader and retailer in watches and jewellery.
Mr Modi appears to have adopted a nonchalant attitude to his fugitive status, walking his small dog each day between his apartment and the diamond company’s office in a town house in Soho, just a few hundred yards from his Centre Point home. Flats like it rent for £17,000 a month.
In August 2018 it was claimed that the Indian government, having
‘He studied in America at the Wharton Business School but dropped out after a year’
established the fact that Mr Modi was in the UK, sent two requests, one from the Enforcement Directorate and another from the Central Bureau of Investigation, to the British government seeking his extradition back to India. Despite this request, The Telegraph has ascertained that no extradition proceedings have been enacted thus far. A Home Office official told The Telegraph that “the UK will neither confirm nor deny that an extradition request has been made or received until an arrest has been made in relation to the request.”
Questioned by The Telegraph, Mr Modi declined to confirm reports that he had applied for political asylum in the UK, replying to all queries with a “no comment”.
While police in India have made several arrests in connection with the case, Mr Modi’s right-hand man, Mihir Bhansali, who fled India at around the same time, and who is also the subject of an Interpol red notice on a charge of money laundering, is believed to be in New York. The Indian government is also seeking the extradition of Mr Choksi, who is now in Antigua and has applied for citizenship, having surrendered his passport to local officials.
The story of Mr Modi’s rapid rise from anonymity to become one of the most high-profile jewellers in the world – with an estimated wealth of £1.3bn – and of his precipitous fall, is an extraordinary one.
Born in Mumbai into a family of jewellers, he studied in America at the Wharton Business School of the University of Pennsylvania but dropped out after less than a year, returning to India to work in the wholesale diamond business run by Mr Choksi.
In 1999 he established his own trading company, Firestar Diamond, and in 2009 launched his own brand of Nirav Modi designed jewellery. A year later, his reputation was made when his Lotus necklace incorporating a 12.29ct Golconda diamond was sold by Christie’s International in Hong Kong for £12.5m. In 2014 he opened his first store in New Delhi, followed by a store in Mumbai in 2015. A hint of troubles to come occurred in that same year, when rumours began to circulate in India that he was on the verge of bankruptcy owing to the global recession in the luxury market, and that his lenders were pressuring him to restructure the firm. At the same time, he was reported to be under investigation by India’s Department of Revenue Intelligence for the alleged diversion of duty-free cut and polished gems and diamonds, and for misrepresenting the worth of imported stones.
But Mr Modi’s ambition remained undimmed. More stores followed in short order – in Kuala Lumpur, Hawaii, Singapore, Macau and Beijing. One associate spoke of how he suffered “palpitations” thinking of Mr Modi’s ultimate aim to open 100 stores worldwide “when just opening five or 10 was an uphill journey”. In person, he cut an unassuming figure – a polite, softly-spoken man, who led a quiet life with his wife and three children in an apartment in the exclusive Mumbai enclave of Worly, hung with more than 400 works of art, who claimed to shop for clothes only once every five years, read classical poetry, and who slept with a copy of the Bhagavad Gita at his bedside. But the picture of a modest, contemplative family man belied a shrewd understanding of how to promote himself and play the luxury market at its own game by an assiduous courting of celebrities and the media.
The opening of his first American store on Madison Avenue, in September 2015, was a characteristically glitzy affair, attended by the actress Naomi Watts and Donald Trump Jnr and his wife Vanessa. In 2016 Kate Winslet appeared on the red carpet at the Academy Awards draped in jewellery, encrusted with almost 100 carats of precious white diamonds, and declaring that Modi’s “feminine modern designs are among my very favourite”. In 2017 he was photographed shaking hands with the Prince of Wales at a reception for the Elephant Parade India at the British High Commissioner’s residence in New Delhi.
In India, the Serious Fraud Investigation Office is yet to submit a report of its investigation into the affairs of 114 entities directly or indirectly associated with Mr Modi and Mr Choksi.
But evidence has already appeared in America on how he operated his business. In August last year, a report by the US bankruptcy court for the southern District of New York, investigating the activities of three American jewellery companies “indirectly owned” by Mr Modi alleged that the companies had engaged in a practice known as “round-tripping” in which loose diamonds were bought and sold multiple times at varying prices using a web of more than 20 secretly controlled shell companies, manufacturing sham transactions in order to fraudulently acquire loans.
According to the report, this practice of round-tripping stones, which ultimately totalled $213.8m (£164m) between 2011 and 2017, generated shipping invoices that were then given to the Punjab National Bank to obtain short-term loans using letters of undertaking (Lous) that would allow Modi’s companies to raise overseas capital for importing pearls and diamonds to make jewellery. However, according to the PNB, the money was used only to “retire import bills or replenish the maturing buyer’s credit of some other banks”, ultimately leading to an “evergreening” of loans, which finally ballooned to a huge sum.
Mr Modi, through his lawyers, has protested his innocence.
In January of this year his lawyers told a Mumbai court that the Enforcement Directorate had tried to “falsely implicate” him for offences “backed by shallow claims”, and that the Punjab National Bank had given a “colour of criminality” to “usual civil banking transactions” to hide its own poor performance. The lawyer further claimed that Mr Modi could not return to India to face charges because he “feared for his safety” after a 50ft effigy of him had been burned on the streets in Mumbai in March last year.
Statements made by politicians from all parties showed that they had “prejudged the issue of his guilt” and his case was being used for political purposes, the pleading added.
Meanwhile, seizures have continued of goods and properties associated with Mr Modi. In January a Mumbai court ordered the demolition of a bungalow owned by Mr Modi at the seaside town of Alibag, which had been built without proper planning permission. Yesterday authorities blew it up using dynamite. Two weeks ago the Enforcement Directorate put a lien on two more properties owned by Modi worth £16m located in Mumbai and Surat in Gujarat.
His former store in Old Bond Street still has his name above the front door, but the windows which once displayed his glittering diamonds are now covered up by paper. Unpaid bills lie scattered on the doormat.
Mr Modi refused to comment when approached by The Telegraph on whether he hopes to stay in Britain. Stepping into a taxi, as it moved down Oxford Street, he could be seen talking urgently on his mobile phone.
‘In January a Mumbai court ordered the demolition of a bungalow owned by Mr Modi … yesterday authorities blew it up using dynamite’