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India

India cancels passport of jeweller to the stars Nirav Modi over massive bank scam

PUBLISHED : Saturday, 17 February, 2018, 6:28pm
UPDATED : Saturday, 17 February, 2018, 10:59pm

Indian investigators have arrested three people who allegedly helped a billionaire jeweller obtain fake documents for overseas loans in one of the country’s biggest bank scams, an official said on Saturday.

Investigators are looking into allegations that Nirav Modi and his business partner Mehul Choksi were involved in defrauding India’s second-largest state-run lender the Punjab National Bank (PNB) of 2.8 billion rupees (US$43.8 million).

The Central Bureau of Investigation (CBI) said it arrested Hemant Bhat, a business associate of Modi, and two PNB officials – former deputy manager Gokulnath Shetty and Manoj Kharat – in Mumbai late on Friday.

“All three arrests were made late last night. They will be produced in a special court sometime later today,” a CBI spokesman said speaking on condition of anonymity.

The men are suspected of having set up fraudulent lines of credit to companies linked to Modi and Choksi, the spokesman said.

Modi is worth US$1.73 billion according to Forbes, placing him 85th on India’s rich list.

The 47-year-old is the founder of Firestar Diamond and jeweller to top Hollywood stars including Kate Winslet and Naomi Watts.

His high-end eponymous Nirav Modi brand has shops in several of the world’s major cities – including on in Elements shopping centre in Hong Kong.

Friday’s arrests came after a money laundering case was registered against Modi and a few others, including members of his family, Shetty and Kharat.

It followed a PNB complaint last month to the CBI that it had been defrauded of 2.8 billion rupees.

The bank announced earlier this week that it had also detected fraud of almost US$1.8 billion at a single branch in Mumbai.

On Friday, New Delhi suspended the passports of Modi and Choksi amid reports they had left the country.

In a statement late on Friday, India’s central bank said it “has already undertaken a supervisory assessment of control systems in PNB and will take appropriate supervisory action”.

The CBI has carried out raids on more properties connected to the pair and has contacted Interpol to track down Modi.

Modi, the third generation of his family to go into the diamond trade, has not commented on the allegations.