Market NewsNewsNirav Modi case: how the fraud unfolded, report

Nirav Modi case: how the fraud unfolded, report

State-owned lender Punjab National Bank (PNB) is at the centre of a $1.8 billion fraud - one of the largest to be detected across the Indian banking sector, reported.

In a statement issued to stock exchanges on Wednesday, PNB said that it has detected some “fraudulent and unauthorised transactions (messages)”, which it has reported to the authorities concerned. Based on these ‘transactions’, other banks appear to have advanced money to customers overseas, said the bank, according to the report.

The quantum of such transactions is $1.77 billion, the bank disclosed, it said.

The fraudulent transactions are allegedly linked to designer and jeweler Nirav Modi, against whom a complaint has been filed with the Central Bureau of Investigation. The first such complaint was filed by PNB on Jan. 28, 2018. BloombergQuint has reviewed the bank’s complaint, which is included in the first information report filed by the CBI on Jan. 31, 2018. The FIR is available on the CBI’s website, said the report.

“The case relates to Nirav Modi and Gitanjali Gems,” said Rajiv Kumar, secretary for the government’s Department of Financial Services, according to the report.

Three firms - M/s Diamonds R US, M/s Solar Exports, M/s Stellar Diamonds - approached the bank for ‘buyers credit’ to make payments to overseas suppliers. According to the complaint, Nirav Modi, Nishal Modi, Ami Nirav Modi and Mehul Choksi were partners in these firms. Choksi, in his Feb. 7 statement, said he had no dealing with Solar Exports and Stellar Diamonds and had retired from Diamonds R US in 1999, said the report.

Read more here