Investigations suggest that 17 more banks are facing exposure as they lent about Rs 3,000 crore to various firms of Nirav Modi, including his flagship firm Firestar International Ltd.
Reports point out that Nirav Modi, besides alleged round-tripping of funds, had been rolling over of the same Letters of Understanding (LoUs) many times.
Among others, the victims were Central Bank of India (Rs 194 crore), Dena Bank (Rs 153.25 crore), Vijaya Bank (Rs 150.15 crore), Bank of India (Rs 127 crore), Syndicate Bank (Rs 125 crore), Oriental Bank of Commerce (Rs 120 crore), Union Bank of India (Rs 110 crore) and IDBI Bank and Allahabad Bank (Rs 100 crore each).
Last week, PNB had lodged a complaint with the Central Bureau of Investigation (CBI) stating that fraudulent letters of undertaking (LoUs) worth Rs280.7 crore were first issued on 16 January. At the time, PNB had said it was digging into records to examine the magnitude of the fraud.
On February 14, state-owned Punjab National Bank (PNB) said it has detected a Rs11,400 crore fraud where Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders, news agencies reported.
On February 15, Enforcement Directorate reportedly conducted multiple searches in connection with a Rs280 crore money-laundering case against the designer and others following a complaint by PNB.
The 47-year-old, who had figured in the Forbes’ list of richest Indians, was booked by CBI for cheating after PNB sent a complaint to it alleging that the jewellery firm owner, his wife, his brother and business partner Mehul Choksi entered into a criminal conspiracy with the officials of the bank and cheated it, causing a “wrongful loss”.
According to the CBI, Modi had left the country on January 1 much before they received the complaint.
In a related development, Priyanka Chopra, who featured in one of the advertisement campaigns for the billionaire jeweller, is currently seeking legal opinion to terminate her contract with the brand, the actor’s spokesperson has reportedly said.
On reports of her taking legal action against the brand for alleged non-payment of dues for the ad campaign, Chopra’s spokesperson said in a statement, “There are speculative reports that Priyanka Chopra has sued Nirav Modi. This is not true. However, she is currently seeking legal opinion with respect to terminating her contract with the brand in light of allegations of financial fraud against Nirav Modi.”
Actor Sidharth Malhotra, who also featured in the same advertisement with Priyanka, was quoted as saying by PTI that since his contract is already over with the brand he is not planning any legal action.
This is not the first instance where a bank fraud of such a large magnitude has taken place. In 2010, Citibank reported a Rs 400 crore fraud which its Haryana branch has unearthed. The police had found involvement of a bank employee and his three accomplices and had charged them for cheating and forgery under relevant sections of the Indian Penal Code.
Last year, Bank of Baroda — another public sector bank — had brought to light a scam in which two Delhi businessmen cheated the BoB of Rs 6,000 crore which slightly less than $1 billion. The Enforcement Directorate, premier investigating agency working under the revenue department of finance ministry, had arrested the businessman duo under money laundering provisions.
(With inputs from agencies and other news publications)