Nirav Modi, one of the richest men in India and who deals in diamonds and pearls, is alleged with a fraud of about $2 billion from Punjab National Bank, shares of which has plunged down drastically after the issue has come to notice on February 14.
Who is Nirav Modi
Nirav Modi was at number 85 on the list of Forbe’s 2017. He has dressed Bollywood as well as Hollywood including actors like Priyanka Chopra and Kate Winslet and Priyanka Chopra. He is 47-year-old, one of the youngest richest person in India.
What PNB alleges
The bank alleges Nirav Modi worked with one of their former employees named Gokulnath Shetty, deputy general manager in the foreign-exchange department, in a PNB branch in Mumbai, the place of origin of the fraud. Shetty then looked after import payments.
What is this fraud about
PNB alleges they used fake PNB guarantees worth $1.8 billion and managed obtaining loans from the overseas branches of Indian banks to import pearls. The fraud dates back to 2011 and they bypassed lender’s internal messaging system to avoid any detection, instructing Swift global payment system to fork out the loans.
How did it come to light
In January 2017 Modi’s company approached the bank for a fresh loan, but successor of Shetty declined to honor the request. Shetty has retired. PNB says investigation is under process.
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