Nirav Modi-PNB fraud: Agencies probe if funds raised through LCs were routed back

The Enforcement Directorate and CBI are probing the alleged Rs 11,400-crore fraud caused to Punjab National Bank. While the ED is probing the money laundering aspect, the CBI is focusing on the criminal conspiracy and misuse of office by bankers and government officials.

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During a CBI raid at Nirav Modi’s farmhouse in Alibaug. (Express)

INVESTIGATIVE AGENCIES are probing if funds raised from Indian banks by the Nirav Modi group of companies through letter of credit (LCs) were routed back to India to his own firms in the name of Foreign Direct Investment (FDI). “We suspect that bogus invoices were raised by ‘suppliers’ for providing rough diamonds or lending other services. We suspect these items were never supplied and the suppliers were actually fronts used to round-trip money,” a senior official told The Indian Express.

The Enforcement Directorate and Central Bureau of Investigation (CBI) are probing the alleged Rs 11,400-crore fraud caused to Punjab National Bank. While the ED is probing the money laundering aspect, the CBI is focusing on the criminal conspiracy and misuse of office by bankers and government officials.

Both agencies soon plan to approach competent courts to issue Letters Rogatory (LRs) to countries such as Belgium, Hong Kong and Dubai to assist them in the probe.

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Nirav Modi operated out of Belgium and Hong Kong. Belgium is one of the preferred destinations for import of rough diamonds by Indian diamond merchants and after cut and polish the stones are exported to Dubai, Hong Kong and Belgium, sources said.

On Thursday, the ED seized nine vehicles allegedly belonging to Nirav Modi and his group of companies. The vehicles were sealed from his Samudra Mahal residence in Mumbai. These include one Rolls Royce Ghost, two Mercedes Benz GL 350 CDI, one Porsche Panamera, three Honda cars, one Toyota Fortuner and one Toyota Innova. Most of the cars have special registration numbers. “The vehicles were found to be registered in the names of Modi and his companies and the keys were with his manager,” said an official.

The agency has also frozen mutual funds and shares worth Rs 7.80 crore of Nirav Modi and Rs 86.72 crore belonging to Mehul Choksi group. The value of the cars are pegged at close to Rs 6 crore. The total attachment by ED on Thursday alone was pegged around Rs 100 crore. With the latest seizures, the agency has seized assets over Rs 5,800 crore.

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Nirav Modi
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