PNB fraud case: UBI seeks release of $8 million from Nirav Modi’s escrow account

As per the charge sheet filed by Enforcement Directorate (ED), Nirav Modi owes around ₹250 crores to UBI

The Union Bank of India (UBI) has approached the special Prevention of Money Laundering Act (PMLA) court for release of around eight million dollars balance in an escrow account held with Nirav Modi. The bank said that the account was opened for remitting/depositing receivable amount from a solar windmill project at Karjat, Ahmednagar.

Nirav Modi, who has been facing an extradition proceeding in London, has been declared as a fugitive economic offender by the special court in Mumbai. (Aniruddha Chowdhury/Mint)

As per the charge sheet filed by Enforcement Directorate (ED), Modi owes around ₹250 crores to UBI.

Nirav had owned a power plant near Khandala in Ahmednagar district of Maharashtra which was opened under the Jawaharlal Nehru National Solar Mission (JNNSM), the plant is a photovoltaic (PV) project with a power capacity of 5MW.

The account and the project were attached by ED during the investigation of money laundering case in 2018. The properties are said to be purchased through the funds received from the banks through credit facilities from various banks. The agency has claimed that it was part of proceeds of crime.

Nirav, who has been facing an extradition proceeding in London, has been declared as a fugitive economic offender by the special court in Mumbai. He is a prime accused in the Punjab National Bank (PNB) fraud case, was the second person to have been declared a fugitive economic offender (FEO) under the new Act (FEO Act). The ED has listed properties valued at ₹1,396.07 crore, which it claimed were purchased or owned using proceeds of crime, for confiscation.

What is an escrow account?

Escrow account is an account where funds are held in trust, whilst two or more parties complete a transaction. The money is released to the creditor after the completion of the terms of the agreement. Further, the creditor has a lien over the account. It is claimed that UBI had financed the windmill project of Nirav Modi and held an escrow account with the bank which has eight-million-dollar balance.