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PNB fraud case: From ED raids to lookout circular against Nirav Modi, 5 developments in the case

From ED raids on Nirav Modi’s properties to the law minister’s press conference, here are five things that happened in the aftermath of the Punjab National Bank scam being exposed.

india Updated: Feb 20, 2018 17:14 IST
HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
‪Punjab National Bank‬,Nirav Modi‬,‪Mumbai
A security guard stands guard inside a Nirav Modi showroom during a raid by Enforcement Directorate, in New Delhi. (REUTERS)

State-owned Punjab National Bank said on Wednesday that it had detected a $1.77 billion (about Rs 11,400 crore) scam at a branch in Mumbai, alleging that diamond merchant Nirav Modi and his business partner Mehul Choksi, the Indian promoter of Gitanjali jewellery chain, defrauded the bank.

In an earlier, related case, filed with the Central Bureau of Investigation Bank (CBI), the bank had said companies linked to Nirav Modi and three others allegedly acquired fraudulent letters of undertaking with the help of bank officials to secure overseas credit from other Indian lenders.

Modi, his wife Ami, his brother Nishal Modi and Choksi have all fled India, and a lookout circular has been issued against them. Here are five things that happened after news of the scam broke:

ED raids

The Enforcement Directorate on Thursday conducted raids at 12 premises belonging to jewellers Nirav Modi and Mehul Choksi of Gitanjali Gems Ltd in Mumbai, Delhi and Gujarat .

A spokesperson for ED, which registered a case under the Prevention of Money Laundering Act (PMLA), confirmed the development. “The raids have been conducted on the charges of money laundering and whether the firms have defrauded the bank,” said the ED official.

The premises raided by the ED in Mumbai include Modi’s residence in Kurla, his jewellery boutique in Kala Ghoda area, three company locations in Bandra and Lower Parel, three premises at Surat in Gujarat and Modi’s showrooms in Chanakyapuri and Defence Colony in Delhi.

Opposition targets government

The Opposition targeted the NDA government over the scam, alleging that it turned a blind eye and allowed billionaire jeweller Nirav Modi to slip out of the country.

Congress president Rahul Gandhi in a tweet compared Nirav Modi to Vijay Mallya and accused the government of looking the other way while Delhi chief minister Arvind Kejriwal accused the Modi government of helping Nirav Modi flee India.

“Is it possible to believe that he or Vijay Mallya left the country without active connivance of the Bharatiya Janata Party (government)?” the Aam Aadmi Party leader asked in a tweet.

Govt says no one will be spared

Law minister Ravi Shankar Prasad held a press conference on Thursday, where he said that assets worth Rs 1,300 crore have been seized and a look-out-notice against Nirav Modi has been issued, news agency ANI reported.

I want to make it clear on the government’s behalf as well that nobody irrespective of his stature in the banking system will be spared,” said Prasad. Tax payers money would not be allowed to go waste, he said.

A parliamentary panel on Thursday questioned finance ministry officials about the fraud asked them to submit a report on it.

PNB stock slumps, bank loses Rs 8,000 crore market cap in 2 days

As news of the scam became public, Punjab National Bank (PNB) lost over Rs 8,000 crore of market valuation in two days -- an amount equivalent to over six-times its full-year profit.

PNB on Thursday extended its fall for the second straight session and ended the day 12% lower at Rs 128.35 on BSE. The stock had fallen 10% on Wednesday, and the market capitalisation of the company has plunged a whopping Rs 8,076.59 crore, to Rs 31,132.41 crore. This is more than 6 times of the company’s full-year net profit of Rs 1,324 crore recorded in FY 2016-17.

Priyanka Chopra mulling termination of contract

Actor Priyanka Chopra, who featured in one of the advertisement campaigns for jewellery designer Nirva Modi, is currently seeking legal opinion to terminate her contract with the brand, the actor’s spokesperson said on Thursday.

On reports of her taking legal action against the brand for alleged non-payment of dues for the ad campaign, Priyanka’s spokesperson said in a statement,”There are speculative reports that Priyanka Chopra has sued Nirav Modi. This is not true. “However, she is currently seeking legal opinion with respect to terminating her contract with the brand in light of allegations of financial fraud against Nirav Modi.”

First Published: Feb 16, 2018 07:29 IST