Nirav Modi accused of swindling $1.8 billion, was with Narendra Modi at Davos on Jan 13, 2018

NEW DELHI / MUMBAI (TIP): Nirav Modi, accused of pulling off possibly India’s biggest bank fraud, was posing for pictures with prime minister Narendra Modi just a few weeks ago. The billionaire diamond merchant was part of the delegation of Indian businessmen and corporate leaders at the World Economic Forum in Davos last month.

On Wednesday, Feb 14, Punjab National Bank (PNB), India’s second-largest state-owned lender, informed stock exchanges that it had detected a massive $1.77 billion fraud at one of its branches in Mumbai. The Central Bureau of Investigation, India’s main investigative agency, first filed a case in this regard on Jan. 31. On Thursday, Feb. 15, the enforcement directorate, a specialized financial crime investigation agency, reportedly raided at least 10 properties owned by Nirav Modi.

In the picture above, Nirav Modi is seen standing next to Rajnish Kumar, chairman of India’s largest state-owned lender, State Bank of India (SBI), which also gave a loan to the diamond merchant based on PNB’s guarantee

This is the second case of a massive alleged fraud to explode during the tenure of the Modi government. In February 2016, another billionaire Vijay Mallya, who was also a member of parliament, was accused of laundering money away from Indian state-owned banks, leaving them with unpaid dues of about Rs 9,000 crore.

Mallya managed to escape to the UK before Indian law enforcement agencies could nab him. If Nirav Modi has indeed fled India as news reports suggest, there will be a lot for the Modi government to explain, again.

If this person had fled India before the FIR on Jan 31, then he is here, photographed at Davos with PM, a week before the FIR, after having escaped from India? Modi govt must clarify. #NiravModi #PublicMoneyLoot pic.twitter.com/gQQnKQNjDo

    — Sitaram Yechury (@SitaramYechury) February 15, 2018

Meanwhile, Hari Prasad SV, the man who Congress says informed the Prime Minister’s Office about the alleged fraud perpetrated by billionaire jewelry designer Nirav Modi in July 2016, said, Feb 15, that he approached the Enforcement Directorate, Central Bureau of Investigation and several other bodies against the accused but to no avail, reported ANI.

“Wrote to PMO in 2016 requesting them to undertake detailed investigation in the matter after we did not get any response from ED, CBI, SEBI, and Ministry of Corporate Affairs. Later, I got a mail from RoC that my case is closed,” ANI quoted the Bengaluru jeweler as saying.

He claimed that he had opened a franchise store with Mehul Choksi, the MD of Gitanjali Group, with an investment of Rs 10 crore.

“As per the agreement, he was supposed to give us gold worth Rs 10 crore, but he gave us gold worth Rs 5 crore only. We finally filed two FIRs against him,” Prasad said.

The Congress, on Feb 15, criticized the PM for failing to take timely action against Nirav Modi.

“Prime Minister, Shri Narendra Modi, was made aware of this entire fraud by one Shri Hari Prasad by way of a written complaint filed on 26th July 2016 and acknowledged by PMO,” said party spokesperson Randeep Surjewala, adding that “no action was taken” and the “bank lost the money and the accused escaped.”

Nirav Modi, his wife, brother, and business partner Mehul Choksi were booked by the CBI on January 31, for allegedly cheating state-run Punjab National Bank of Rs 280 crore.

The bank later sent two more complaints to the CBI, saying the scam was worth more than Rs 11,400 crore.

Modi grew up in Antwerp, Belgium, in a diamond-dealing family. In 1990, at the age of 19, he moved to Mumbai.

Nine years later, Modi started his own company, Firestar Diamond Ltd., selling loose stones. He employed fewer than a dozen people at the time. By last year, the number was more than 2,000.

He said he came to realize the margins were better in retail.

Firestar Group, the parent company Modi controls as a majority shareholder, saw its revenue grow over three years from 103 billion rupees (about $1.6 billion at current rates) to some 147 billion rupees ($2.3 billion) by the 2016-17 fiscal year, according to figures previously provided by the company.

In 2010, Modi launched an eponymous jewelry business branded NIRAV MODI, in capitals, with the tagline “Haut Diamantaire”. New boutiques in Las Vegas and Hawaii have since been added to a stable that stretches from New York to London to Beijing.

He became a man whose diamond necklaces were sold, with his name attached, by Sotheby‘s. “Pure feminine elegance,” says a Hong Kong auction catalogue note of one 85.33 carat diamond necklace.

The auction house posted an online slideshow of jewelry-on-stars at the 2017 Oscars and highlighted supermodel Karlie Kloss having “a major Nirav Modi moment with her diamond ‘Mughal’ choker.”

But the celebrity links could be starting to break.

A spokesperson for Chopra, the film star, said in a statement: “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.”

(With inputs from agency reports)