Nirav Modi Explained

Nirav Modi
Birth Date:27 February 1971[1]
Birth Place:Palanpur, Gujarat, India
Nationality:Belgian (Indian formerly)
Alma Mater:Wharton School (University of Pennsylvania)
Years Active:1989–2018
Organization:Firestar Diamond International, Gitanjali Group, A. Jaffe Inc.
Known For:Diamond business bank fraud, wanted by Interpol[2]
Criminal Charge:Criminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, corruption, money laundering, fraud, embezzlement and misrepresentation
Conviction Status:Arrested (in London, 20 March 2019)
Spouse:Ami Modi
Children:3
Relatives:Mehul Choksi (uncle)
Wanted By:Interpol, The Judicial Authorities of India, Los Angeles Police Department, New York Police Department, Federal Bureau of Investigation, Royal Canadian Mounted Police
Wanted Since:August 2018
Victims:Union Bank of India, Punjab National Bank, Paul Alfonso, Amukurajuddin Bohra
Locations:Dubai
Hong Kong
London
Singapore
Imprisoned:HM Prison Thameside, UK

Nirav Deepak Modi (born 27 February 1971) is an Indian-born Belgian businessman and criminal who was charged by Interpol and the Government of India for criminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, corruption, money laundering, fraud, embezzlement and breach of contract in August 2018.[3] Modi is being investigated as a part of the $2 billion fraud case[4] [5] of Punjab National Bank (PNB). In March 2018, Modi applied for bankruptcy protection in Manhattan, New York.[6] In June 2018, Modi was reported to be in the UK applying for political asylum.[7] [8] In June 2019, Swiss authorities froze a total of US$6 million present in Nirav Modi's Swiss bank accounts along with the assets.[9] [10] [11]

Biography

Early life

Nirav Modi was born in Palanpur, Gujarat, and grew up in Antwerp, Belgium. His family has been in the diamond business for several generations.[12] [13] When he was 19, he and his father Deepak Modi moved to Mumbai to work with his uncle, Mehul Choksi. Choksi is the head of Gitanjali Group, a retail jewellery company with 4,000 stores in India.[14] [15]

Modi attended the Wharton School at the University of Pennsylvania but eventually dropped out.[16] [17] While studying, he met his future wife, Ami, the daughter of a diamond businessman Amukuraj Choksey.[18]

Career

After moving to India in 1989 and training in all aspects of the diamond trading business, Modi founded Firestar in 1999 (formerly known as Firestone), a diamond sourcing and trading company.[19] Firestar is the exclusive distributor of Rio Tinto’s Argyle pink diamonds in India.[20]

In 2002, his company started manufacturing jewellery on a contract basis. He acquired Frederick Goldman in 2005, and Sandberg & Sikorski and A.Jaffe in 2007 in the USA.[21]

In 2008, a close friend asked Modi to make a pair of earrings, after which he created the brand.[22] In 2010, he launched a diamond store bearing his name in New Delhi's Defence Colony, followed by one in Mumbai's Kala Ghoda. 17 other store openings followed across the world.[23] Modi launched globally with boutiques in New York City and Hong Kong in 2015, followed by two other boutiques opened in Hong Kong in 2016[24] and one in MGM Macau in 2016.[25]

He became well known after he designed his "Golconda Lotus Necklace" with an old, 12-carat, pear-shaped diamond as a centerpiece in 2010. The diamond had been previously sold in the 1960s; Modi repolished it.[26] The necklace featured a lattice of white and pink diamonds. It was included on the cover of Christie’s catalogue in Hong Kong and was auctioned for US$3.6 million in 2010.[27] [28]

In 2012, another Modi necklace, the Riviere of Perfection, was sold at Sotheby’s Hong Kong auction. This necklace featured 36 flawless white diamonds and weighed a total of 88.88 carats.[29] [30]

It is believed that he was overextended for several years and used new MOUs to pay for the past ones for about seven years. One of his employees has stated that, "He wanted to grow his business, and to do in five years what might otherwise have taken 20 years." He claimed that "If he’d gone public, maybe he could have pledged his equity, raised some money, and finally paid the bank back. Perhaps he would have done that."[31]

Dealings with Union Bank of India

The Union Bank of India sued Modi in a Hong Kong court. Union Bank claimed in a writ filed at the High Court on 26 September 2018 that Modi guaranteed two loans made to Firestone Trading Private and Firestar Diamond in 2011. The bank demanded that he pay more than $5.49 million plus interest after both firms allegedly defaulted on repayments.[32]

2018 Investigation and Lawsuits (PNB fraud case)

Complaint from Punjab National Bank

In February 2018, the Indian government's Central Bureau of Investigation (CBI) launched an investigation of Modi, acting on a complaint from the Punjab National Bank. The complaint alleged that Modi and his partners defrauded the bank of ₹28000 Crore (approximately US$4 billion) by conspiring with bank officials to fraudulently obtain Letters of Undertaking for making payments to overseas suppliers.[33] While ₹28000 Crore is the fraud that has been alleged to date, the potential loss to Punjab National Bank is reported to be up to ₹11000 Crore. The Enforcement Directorate (ED) is also investigating the fraud case that the CBI registered against him.[34]

Modi responded to the bank on 15/16 February 2018, stating that "In the anxiety to recover your dues immediately, despite my offer (on 13 February, a day before the public announcement, and on 15) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts".[35] Modi estimated his domestic business at around Rs 6,500 Crore, and said "this could have helped reduce/discharge the debt to the banking system," but claimed that this was currently impossible as all his bank accounts had been frozen and assets had been seized.[36]

Arrest and Extradition Case

In April 2018, Indian authorities alleged that Modi had found safe haven in Hong Kong and formally requested his arrest.[37] However, a few months later, he applied for asylum in the UK, claiming he was a victim of "political persecution" and denying any wrongdoing.[38] [39] [40] In March 2019, The Telegraph reported that he was living in an £8 million apartment in London, and Indian authorities requested his extradition from the UK.[41] On 20 March 2019, he was arrested in London after a warrant was issued against him.[42] [43] Modi applied for bail in the UK High Court on 3 May, a day after his remand was extended. All his requests for bail have been rejected as of October 2020.[44]

On 25 February 2021, a UK court allowed the Indian government's request to have Modi extradited to India as a key defendant in the PNB fraud case.[45] The UK Home Secretary signed the extradition order on 15 April.[46] Modi then had 14 days to appeal the decision to the UK High Court, which he did on 1 May, claiming he would not get a fair trial in India.[47] During the appeal, Modi remained imprisoned at Wandsworth Prison in south-west London. On 23 June 2021, a UK high court rejected Modi's application to appeal his extradition to India.[48]

In December 2022, the Royal Courts of Justice in London refused permission for Nirav Modi to appeal his extradition to the UK Supreme Court and ordered him to pay legal fees of £150,247.[49]

Impact of the Case on Modi's finances and business

Initially, a few of Modi's stores remained open for business, including his store at Marina Bay Sands in Singapore;[50] however these have gradually all closed.[51] On 7 March 2018, Modi's firm Firestar Diamond Inc. applied for bankruptcy protection at a Manhattan bankruptcy court, in order to protect its assets in the United States and their revolving credit facility with Israel Discount Bank.[52] His company, A.JAFFE, acquired through his Synergies Corporation, was auctioned in May 2018 and was purchased by Parag Diamond.[53] With the collapse of his brand, Modi's fortune has collapsed.[54] Forbes removed him from their annual billionaires list, and on 9 March 2018, estimated his current wealth to be less than $100 million.[55]

Modi's properties in India, including jewellery, paintings, and real estate, worth about Rs 523 crore (about $75 million) have been seized by the Enforcement Directorate (ED).[56] Previously, Modi had bought a Rs 900 crore sea-facing property in Mumbai's coveted Samudra Mahal properties with his wife Ami Modi.[57]

The ED has also seized four wind power plants, owned by Modi, in Rajasthan with a total capacity of 9.6 megawatt (MW). The plants earn up to Rs 5 crore a year due to a share purchase agreement with Rajasthan's state electricity board. These wind power plants have been operational since 2014. In March 2018, the ED seized a 5.24 MW solar power plant spread over 135 acres in Karjat in Ahmednagar district worth Rs 60 crore. In May 2018, the CBI and the ED had registered two FIRs each to probe the case.[58]

In March 2019, 68 works from Modi's art collection, were sold on behalf of India's income tax department.[59] The artwork was sold for £5.3m including a Vasudeo S. Gaitonde painting that sold for £2.6m.[60] The iconic music store Rhythm House, at Kala Ghoda, Mumbai, is planned to be auctioned after its value is determined.[61] It was bought by Nirav Modi in 2017.[62]

On 8 June 2020, the Prevention of Money Laundering Act (PMLA) Court ordered a confiscation of nearly Rs 1,400 crores worth of his property.[63]

The October 2021 Pandora Papers showed that his sister, Purvi Modi, set up an offshore firm just one month before he fled India.[64]

As a result of the fraud case, the Reserve Bank of India has stopped issuing Letters of Undertaking (LoU) and Letters of Comfort (LoC) for imports, which has limited the financial flexibility of importers.[65] [66]

Achievements and recognition

Personal life

Nirav Modi is married to Ami Modi.[72] [73] They met when both were students at the Wharton School of the University of Pennsylvania, although Nirav Modi left Wharton after a year to return to the diamond business.[74] [73]

Ami Modi is a US citizen by birth.[75] She ran the "Nirav Modi Scholarship for Excellence", which supported 250 students every year. Ami and Nirav Modi have three children - two daughters and one son. They have attempted to raise their children conservatively and only use Gujarati in their home.

Notes and References

  1. Web site: MODI, NIRAV . . 2 July 2018 . https://web.archive.org/web/20180710005839/https://www.interpol.int/notice/search/wanted/2018-14762 . 10 July 2018 . dead .
  2. Web site: Nirav Modi Interpol profile. 2 July 2018. https://web.archive.org/web/20180710005839/https://www.interpol.int/notice/search/wanted/2018-14762. 10 July 2018. dead.
  3. Web site: - INTERPOL. interpol.int. en-GB. 2018-08-30. https://web.archive.org/web/20180710005839/https://www.interpol.int/notice/search/wanted/2018-14762. 10 July 2018. dead.
  4. Web site: 27 February 2018. PNB fraud put at close to $2.1 billion. 4 March 2018. India Today.
  5. News: Eyes wide shut: the $1.8 billion Indian bank fraud that went unnoticed. Reuters.
  6. News: India fraud probe drove Nirav modi's jeweler to U.S.Bankruptcy filing. 9 March 2018. bloomberg.com. 7 March 2018 . Bloomberg News. 8 March 2018.
  7. News: 2018-06-11. Indian jeweller 'seeking asylum' in London. en-GB. BBC News. 2018-06-11.
  8. Web site: Behind bars: India's 'Diamond King' Nirav Modi's fall from grace. John. Zubrzycki. 26 April 2019. The Sydney Morning Herald.
  9. Web site: Swiss authorities seize Nirav Modi, sister Purvi's four bank accounts with assets worth Rs 283 crore. 2019-06-30. businesstoday.in. 27 June 2019 .
  10. Web site: PTI. Swiss authorities freeze 4 bank accounts of Nirav Modi, sister Purvi Modi. 2019-06-30. @businessline. 27 June 2019 . en.
  11. Web site: 2019-06-28 . Four bank accounts of Nirav Modi, family frozen in Switzerland . 2024-07-09 . The Indian Express . en.
  12. Web site: Who is Nirav 'NiMo' Modi?. nationalheraldindia.com. 4 March 2018.
  13. Web site: નીરવ મોદીના છળ સામે હીરાનું તેજ ઝંખવાયું . 22 February 2018 . Sambhaav News . gu . 4 March 2018 . https://web.archive.org/web/20180228161547/http://sambhaavnews.com/the-diamond-shines-in-front-of-nirav-modi-s-hood/ . 28 February 2018 . dead .
  14. Web site: The billionaire who allegedly swindled $1.8 billion from an Indian bank. Anwesha. Ganguly. qz.com. 15 February 2018 . 4 March 2018.
  15. News: Who is billionaire jeweller in fraud probe?. BBC News. 16 February 2018. 4 March 2018.
  16. News: Billionaire Jeweler Nirav Modi Investigated for Bank Fraud. 2018-02-12. The Diamond Loupe. 2018-08-31. en. 31 August 2018. https://web.archive.org/web/20180831211814/https://www.thediamondloupe.com/jewelry/2018-02-12/billionaire-jeweler-nirav-modi-investigated-bank-fraud. dead.
  17. News: Nirav Modi: When diamonds are not forever. 18 February 2018. Nilima Pathak. Gulf News. 8 May 2018.
  18. News: Sen. Upala. 2018-02-18. Jewel Thief. en. The Telegraph. dead. 2021-05-17. https://web.archive.org/web/20180218055046/https://www.telegraphindia.com/india/jewel-thief-209343. 2018-02-18.
  19. News: Lall. Pavan. Can Nirav Modi win New York?. 7 September 2016. Fortune India. 10 January 2015. https://web.archive.org/web/20160920190733/http://www.niravmodi.com/wp-content/uploads/2015/10/NIRAV_MODI_Article_Fortune_India_Oct_2015.pdf. 20 September 2016. dead.
  20. Web site: Tacy LTD - ARGYLE PINK DIAMONDS PARTNERS WITH INDIAN JEWELRY MANUFACTURER. diamondintelligence.com. 4 March 2018. 26 February 2018. https://web.archive.org/web/20180226211620/http://www.diamondintelligence.com/magazine/magazine.aspx?id=9160. dead.
  21. Web site: Nirav Modi became a jewelry-design billionaire, without ever learning to draw . Gauri Bhatia, Special to CNBC. 10 June 2016. cnbc.com. 4 March 2018.
  22. News: Kaul. Anuradha. The Bling Maestro. 8 September 2016. Millionaire Asia. 1 April 2015. 20 September 2016. https://web.archive.org/web/20160920190813/http://www.niravmodi.com/wp-content/uploads/2015/04/2015-04-01-Millionaire-Asia.pdf. dead.
  23. Web site: Indian diamond mogul Nirav Modi loses sparkle. Nikkei Asian Review. 11 June 2018.
  24. News: Saini. Mayu. 22 September 2015. Indian Jeweler Nirav Modi Opens New York, Hong Kong Stores. WWD. Fairchild Publishing, LLC. subscription. 8 September 2016.
  25. News: Daswani. Kavita. 19 September 2016. Nirav Modi: the diamond master opens his first boutique in Macau. South China Morning Post. 18 November 2016.
  26. Web site: An interview with Nirav Modi: diamond collector and creator of exceptional Indian jewels. 4 June 2013. thejewelleryeditor.com. 4 March 2018. 26 February 2018. https://web.archive.org/web/20180226151959/http://www.thejewelleryeditor.com/jewellery/article/an-interview-with-nirav-modi-diamond-collector-and-creator-of-exceptional-indian-jewels/. dead.
  27. News: Liu. Ming. Asian jewellery designers harbour global ambitions . Financial Times . 30 September 2014 . 8 September 2016.
  28. Web site: Jewels: The Hong Kong Sale . 29 November 2010 . https://web.archive.org/web/20160918015219/http://www.christies.com/LotFinder/lot_details.aspx?from=salesummary&pos=1&intObjectID=5370899&sid=006838cd-1405-4d66-bdd9-16449a0e2c50 . 18 September 2016 . live . dmy.
  29. News: Rathore. Vijaya. Nirav Modi's Rs 50 cr diamond necklace to be the star of Sotheby's auction. 6 September 2016. Economic Times. 24 January 2014.
  30. Web site: Superb Diamond Necklace . 20 June 2012 . Sothebys . 6 September 2016 .
  31. News: Did This Jeweler to the Stars Commit the Biggest Bank Fraud in India's History?. Bloomberg.com . 28 June 2018 . 5 July 2018.
  32. Web site: Union Bank sues Nirav Modi in Hong Kong court: Report . 27 September 2018 . IANS India Private Limited . 28 September 2018 .
  33. News: 5 February 2018 . Indian billionaire jeweller investigated over bank fraud . 6 February 2018 . Reuters .
  34. Web site: Enforcement Directorate files money laundering case against billionaire jeweller Nirav Modi. Scroll.in. 15 February 2018. 15 February 2018. 1 May 2018. https://web.archive.org/web/20180501022030/https://scroll.in/latest/868775/enforcement-directorate-files-money-laundering-case-against-billionaire-jeweller-nirav-modi. dead.
  35. Web site: 20 February 2018 . Nirav Modi's letter to PNB: Your actions destroyed my brand, closed all options to recover dues . 5 July 2018.
  36. Web site: 'I urge you to be fair': Read Nirav Modi's full letter to Punjab National Bank . 5 July 2018 . India Today.
  37. News: India wants fugitive billionaire Nirav Modi arrested in Hong Kong . 2018-06-11 . South China Morning Post . en.
  38. News: 10 June 2018 . Billionaire jeweller Nirav Modi flees to UK, claiming political asylum - FT . 11 June 2018 .
  39. News: Billionaire jeweller Nirav Modi flees to UK, claiming political asylum: Report - Times of India . 2018-06-11 . The Times of India.
  40. News: 10 June 2018 . Indian celebrity jeweller flees to UK claiming political asylum . 2018-06-11 . Financial Times . en-GB.
  41. News: Mendick . Robert . Sawer . Patrick . Brown . Mick . Ray . Saptarshi . 9 March 2019 . Home Secretary agrees to extradition of Indian diamond tycoon found living in London . 9 March 2019 . The Telegraph.
  42. Web site: Nirav Modi arrested in London, to appear in UK court shortly . Moneycontrol.
  43. News: 20 March 2019 . Billionaire celebrity jeweller held in UK . BBC News.
  44. Web site: 5 June 2019 . Govt re-auctions 7 luxury cars of Nirav Modi, sale of 5 fetch Rs 2.9 crore .
  45. News: Shirbon . Estelle . 2021-02-25 . UK court allows extradition of diamond billionaire Nirav Modi to India . 2021-05-17 . . en.
  46. Web site: Canton . Naomi . 2021-04-17 . UK home secretary Priti Patel orders extradition of Nirav Modi to India - Times of India . 2021-05-17 . . en.
  47. Web site: Pandey . Munish Chandra . 2021-05-01 . Nirav Modi appeals against extradition to India before UK High Court . 2021-05-17 . India Today . en.
  48. Web site: 23 June 2021 . UK court refuses Nirav Modi's application to appeal against extradition to India . 28 June 2021 . The Times of India . en.
  49. News: December 15, 2022 . Fugitive Nirav Modi loses bid to appeal against extradition . January 10, 2023 . The Times of India.
  50. Web site: Business as usual at Nirav Modi's Singapore store. connectedtoindia.com. 4 March 2018.
  51. Web site: Nirav Modi at The Shoppes. marinabaysands.com. 5 July 2018.
  52. Web site: Firestar diamond inc. Case number 18-10509. firstpost.com. 2 March 2018. U.S.Bankruptcy court, Southern district of New York (Manhattan). 9 March 2018.
  53. Web site: Parag Diamond is the winning bidder of Nirav Modi's company A Jaffe . 5 July 2018.
  54. Web site: Cam . Deniz . Indian Jeweler Nirav Modi's Fortune Up In Smoke Amid Bank Fraud Allegations . 5 July 2018 . Forbes.
  55. Web site: Çam . Deniz . 2018-03-09 . Indian Jeweler Nirav Modi's Fortune Up In Smoke Amid Bank Fraud Allegations . 2021-05-17 . . en.
  56. News: Feb 24, 2018 . ₹ 523 Crore In Nirav Modi Assets, Including Luxury Penthouse, Seized . May 11, 2024 . NDTV.
  57. News: Menon . Rashmi . 2018-03-15 . Nirav Modi bought a Rs 900 crore sea-facing property in Mumbai's coveted Samudra Mahal . 2018-03-15 . The Economic Times.
  58. Web site: PNB fraud case: ED attaches 4 wind power plants owned by Nirav Modi in Rajasthan. 30 May 2018. yahoo.com/. 30 May 2018.
  59. News: 26 March 2019 . Arrested billionaire's art fetches $8m . BBC News.
  60. Web site: 10 August 2021 . Jailed diamond dealer and art collector Nirav Modi fights extradition to India on mental health grounds . The Art Newspaper - International art news and events.
  61. Web site: 22 December 2021 . ED starts detaching assets of companies owned by Nirav Modi; to auction Mumbai's Rhythm House . Deccan Herald.
  62. Web site: Krishna . Ujjvala . 13 September 2020 . Things you did not know about Rhythm House, Mumbai .
  63. News: Lall . Pavan . Choudhary . Shrimi . 9 June 2020 . PMLA court orders seizure of Nirav Modi's assets worth Rs 1,400 crore . live . https://web.archive.org/web/20230821022102/https://www.business-standard.com/article/current-affairs/pmla-court-orders-seizure-of-nirav-modi-s-assets-worth-rs-1-400-crore-120060801594_1.html . 21 August 2023 . 11 May 2024 . Business Standard.
  64. News: Narayan . Khushboo . 6 October 2021 . Pandora Papers: Before Nirav Modi fled, sister founded offshore firm to act as trust protector . 6 October 2021 . . English.
  65. Web site: LoU ban to impact financial flexibility of importers: Ind-Ra . https://web.archive.org/web/20210927193853/https://www.diamondworld.net/contentview.aspx?item=16232 . 27 September 2021 . 5 July 2018 . Diamond World.
  66. News: RAGHAVAN . T.C.A. SHARAD . 6 August 2018 . RBI must resume issuing LoUs, LoCs, says parliamentary panel . live . https://web.archive.org/web/20240511100126/https://www.thehindu.com/business/Industry/rbi-must-resume-issuing-lous-locs/article24617751.ece . 11 May 2024 . 11 May 2024 . The Hindu.
  67. News: Sharma. Purinma. On the rocks. https://web.archive.org/web/20130508001656/http://www.timescrest.com/life/on-the-rocks-9846. dead. 8 May 2013. 7 September 2016. The Times Of India. 23 February 2013. dmy-all.
  68. News: Newman. Jill. Kid rock. 6 September 2016. Robb Report. 1 September 2015.
  69. Web site: Nirav Modi - Forbes India Magazine. 2021-05-17. Forbes India. en.
  70. Web site: JASMINE CUT DIAMOND, United States Design Patent USD763118S1.
  71. Web site: JEWELRY DESIGN USD738777.
  72. Web site: Interpol profile: Nirav Modi. 2 July 2018. https://web.archive.org/web/20180710005839/https://www.interpol.int/notice/search/wanted/2018-14762. 10 July 2018. dead.
  73. Web site: Ami Modi, Nirav's Wife: 5 Fast Facts You Need to Know. Paul. Farrell. 16 February 2018. heavy.com. 4 March 2018.
  74. Web site: 10 Facts About Nirav Modi, The Man At The Centre Of PNB Fraud. ndtv.com. 4 March 2018.
  75. Web site: જુઓ આવો છે કૌભાંડી નિરવ મોદીની પત્ની અમી મોદીનો વૈભવી ઠાઠ. 17 February 2018. 5 July 2018.

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