On 15th February 2018, the Enforcement Directorate raided jeweller Nirav Modi's properties and seized assets worth Rs 1,300 crore. There are charges of money laundering and bank fraud against him, his wife Ami, partner Mehul Choksi and brother Nishal. It’s being called India’s biggest corporate fraud. Opposition leaders are calling for accountability from the government; pointing out that Nirav Modi was photographed along with PM Narendra Modi in Davos just weeks ago. What is the 1.8 billion dollar or Rs 11.400 crore fraud all about? Should the government be embarrassed?
Part of a family of diamond merchants, Nirav Modi grew up in Antwerp, Belgium and dropped out of Wharton. He wanted to create a jewellery brand like Cartier and created waves in 2010 when his stunning Golconda Lotus Necklace was sold at a Christie's auction for $3.6 million.
Nirav Modi and his brand clearly meant to cater to the rich and famous and have been associated with top Indian and foreign celebrities. Priyanka Chopra is a brand ambassador, Kate Winslet and many others have sported his designs on the international red carpet.
The current issue is about Letters of Understanding issued by the Punjab National Bank favouring Nirav Modi’s businesses and debts run up by Modi and his associates and money laundering to the tune of hundreds of crores. It seems clear the fraud could not have been perpetrated without the collusion of bank officials who circumvented the bank’s SWIFT core banking system.
It is now being alleged by the opposition and other sources that Bangalore based jeweller Hariprasad SV had informed the PMO about a potentially huge fraud by Mehul Choksi (Modi’s uncle and business associate) back in June 2016. He had alleged that a megabank scam was afoot, that franchisees were being defrauded and expressed apprehension that the perpetrators would escape.
Much is now being made of the fact that Nirav Modi was photographed in Davos along with Prime Minister Narendra Modi. The opposition has alleged political patronage and has hinted that Nirav Modi was tipped off about proceedings to be initiated against him which prompted his feeling India.
The BJP has been at pains to point out that Nirav Modi was not part of the contingent, but there on his own steam. Though finance minister Arun Jaitley is yet to issue official clarifications, Union Law Minister Ravi Shankar Prasad termed the opposition’s ‘Chhota Modi’ remark as ‘shameful’.
In the beginning of January 2018, Nirav Modi, wife Ami, brother Nishal and uncle Mehul Choksi left India and are currently out of reach of the Indian banking system and law enforcement agencies aboard. Yet another fraudster is now absconding in spite of prior alerts of their fraudulent dealings.
The timeline: leaving India in the beginning of January and initiation of proceedings in the end of January seems altogether too convenient. Even if Nirav Modi was not part of the official contingent at Davos, sharing a stage with the PM is an inescapable embarrassment for the ruling party and the PM.
It is the nature of social media, that the minute there is a sensational new story, the jokes fly thick and fast. This one was circulating on WhatsApp, Twitter and Facebook within hours of the story breaking.
The government alleges that the fraud started in 2011 and hence the then UPA government is responsible. However, the opposition alleges that the fraud is of a later date and that the current government is responsible for not having taken action in spite of being alerted; and guilty of permitting criminals to escape yet again. While the two sides engage in bickering and blaming each other, it is public money at stake here; one more clever fraudster living abroad ensconced in luxury while we the people wring our hands in hopelessness.
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