PNB fraud: Court issues notices to Nirav Modi’s brothers, associates

The court held that the ED’s applications and supporting material justified issuing notices requiring the accused to explain why they should not be declared fugitive economic offenders

MUMBAI: A special PMLA court has issued notices to five persons, including fugitive diamantaire Nirav Modi’s brothers Neeshal and Nehal, on applications filed by the Enforcement Directorate (ED) seeking to declare them fugitive economic offenders in connection with the ₹13,850-crore fraud at Punjab National Bank (PNB) and initiate proceedings to confiscate their assets.

PNB fraud: Court issues notices to Nirav Modi’s brothers, associates

In separate orders passed on Wednesday, Special Judge AV Gujarathi directed issuance of notices to Modi’s brothers along with their close associates Mihir Rashmi Bhansali, Aditya Nanavati and Sandeep Bharat Mistry, under the Fugitive Economic Offenders Act, 2018.

The court held that the ED’s applications and supporting material justified issuing notices requiring the accused to explain why they should not be declared fugitive economic offenders. The notices are returnable on May 7.

The proceedings arise from the ED’s money-laundering investigation linked to the PNB fraud, one of the largest banking scams in India.

Neeshal and Nehal are alleged to have played roles in financial transactions linked to the alleged bank fraud. The ED’s applications rely on the criminal case registered by the Central Bureau of Investigation (CBI) on January 31, 2018, and the agency’s Enforcement Case Information Report (ECIR) recorded the following month, on February 14, under the Prevention of Money Laundering Act (PMLA).

The court noted that non-bailable warrants issued earlier against all five accused, including Modi’s brothers, remain unexecuted. In the case of Neeshal, warrants were issued on May 23 and July 27, 2018, while Nehal faces warrants issued on July 27, 2018 and June 29, 2020.

Separate notices were issued against Bhansali, Nanavati and Mistry, all of whom are accused in the ED’s money-laundering probe linked to the PNB fraud.

In Bhansali’s case, the court additionally issued a notice regarding confiscation of properties identified by the ED as alleged proceeds of crime, under the Fugitive Economic Offenders Act. The order also directs issuance of notices to his wife Rakhi Bhansali, PNB and Union Bank of India, in relation to properties over which they may have an interest.

Investigators allege that Nanavati, who headed operations at Modi’s Firestar Group in Hong Kong, helped siphon funds routed through overseas entities and is already subject to an Interpol Red Corner Notice.

Bhansali, on the other hand, is described by investigators as a close associate of Modi, who is allegedly linked to financial transactions connected to the alleged laundering of funds in the PNB case. Mistry has been identified as a director of World Diamond Distribution FZE, one of the overseas companies allegedly used in the alleged fraudulent scheme.

The Fugitive Economic Offenders Act allows authorities to declare persons accused of economic offences above ₹100 crore as fugitives if they evade criminal prosecution by remaining outside India, enabling the government to confiscate their properties.

The court will consider the ED’s applications further after the accused respond to the notices on May 7.

Nirav Modi and his maternal uncle Mehul Choksi are the prime accused in the ₹13,850-crore fraud at Punjab National Bank. They are accused of defrauding the public sector bank by obtaining fraudulent Letters of Undertaking, enabling them to secure overseas loans without proper collateral. Modi was declared a fugitive economic offender in December 2019.