Diamond merchant Nirav Modi just tip of the fraud

A week is a long time in business. Only the other day, diamond merchant Nirav Modi stood accused of cheating the PNB of Rs 280 crore. But now it has emerged that the fraudulent transactions were to the tune of Rs 10,000 crore.

The allegation is that Nirav, his wife, brother and others connived with PNB officials to illegally obtain Letters of Undertaking, which were cashed overseas from different banks, both private and public sector. The CBI has been told that at least eight Letters of Understanding were issued to the billionaire jeweller, without being entered in the books, directly for Hong Kong-based banks. The alleged fraud was facilitated by senior bank officials since 2011, CBI have sources said.

On Wednesday, after all hell broke loose in the banking sector, the Enforcement Directorate registered a money laundering case against the diamond dealer on the basis of a CBI FIR filed earlier this month.Nirav was cut out for a career in diamonds – he grew up in Antwerp, the diamond capital of the world. Such was his passion that he dropped out of Wharton School of Pennsylvania in the US to take up diamond business, said media reports.

Then, followed a series of launches – his first flagship store in New Delhi, followed by another in Mumbai, where he also has his headquarters. Then came the splash in 2016 -Nirav opened a store in New York near Madison Square with much fanfare. Those who attended the store opening included Hollywood actor Naomi Watts, Bollywood actors and models Lisa Haydon and Nirmrat Kaur and top fashion model Coco Rocha. Actor Priyanka Chopra is the brand ambassador for his jewellery designs.

That was not all – today, his footprint spans three continents from China in Asia to Hawaii Islands in North America. He made it to the Forbes' list of billionaires in 2013 and has remained in the exclusive group ever since. Wikipedia says that he is first Indian jeweller to land on the cover of both Sotheby's and Christie's catalogues. He has promoted diamonds as an investment. Some of these investments have turned sour.