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Nirav Modi is the first name we think of when somebody uses the word Scam? do you know Nirav Modi? As a diamond merchant or A person who did the scam?. Well, this question is still open for all. He was a well establish diamond merchant with a vision to place his brand globally with competitions like a Cartier! What happened to the vision Nirav Modi and the team claimed? The most asked Question about Nirav Modi is not his latest diamond collection but how he succussed to do a scam of such magnitude?
Who is Nirav Modi?
The time that his alleged financial Shenanigan made the headlines in the country and his fleeing the country inspired the hilarious #FindingNimo. The name Nirav Modi rang a bell at least for ordinary Mumbaikars thanks to hoardings plastered across the city. But the 47- old Haut Diamantaire had in less than a decade become a name to reckon with among the luxury diamond jewellery brands. His client includes Dakota johnson seen here at golden globes and kate Winslet seen here at 2016 Oscars.
As per the link posted on his website Modi’s career as a jewellery designer was almost accidental when he did a favour by designing a pair of earrings. In 2010, Modi became the first Indian jeweller to be a feature on Christie’s Cover. The Golconda lotus necklace that featured was auctioned for $ 3.6 million. Modi also made it to the Sotheby’s cover. In 2013, Modi became one of the youngest Indians to make it to the Forbes billionaire’s list. In 2015, he launched his first store on New York’s Madison Avenue. The function was attended by then US presidential candidate Donald Trump. Nirav Modi financial worth is an estimated $1.73 billion.
Modi was born in India to a family in the Diamond Business. He was raised in Antwerp in Belgium. Where his family had moved to be at the centre of the world’s diamond trade. He went to Wharton Business school but dropped out and moved back to India. Where he trained in the diamond business under his uncle Mehul Choksi who ran Gitanjali gems. Modi went on to set up the Firestar Diamond International Pvt. Ltd under which the Nirav Modi brand operates. A fascinating business, Lifestyle everything one can dream to be successful was Nirav Modi living.
What happened in January 2019? Why CBI booked Nirav Modi, wife Ami brother nishal and uncle Mehul Choksi in an alleged cheating case on the complaint by the PNB.
We breaking down that for you!
As so many of us don’t know about the detailed explanation of this scam. So, today I am breaking down that for you, “Nirav Modi’s role” behind this largest Punjab National Bank Scam. Nirav Modi scam is one of the largest scams ever that happened in Banks. The Total Value of this scam is around 11,000 crores rupees. Here I am going to explain this scam in simple words:
This Big time scam was first started in 2011, it was well planned. A man whose name is Nirav Modi has Jewellery and diamond business. Every year, he has to import diamonds from a Hong Kong seller. Hence to import diamonds, he has to pay money to the Hong Kong seller. Nirav Modi got a snapshot, If he continues to give money to the seller directly, then his assets will decrease. Instead, Nirav Modi wanted to take a loan from a bank. He went to the Punjab National Bank of Mumbai Branch and asked the branch office for the loan.
Somehow the bank officers were convinced with the purpose of the loan and explained understanding of the system for this import-export business. The tie-up with overseas banks eases the interest rate. To obtain such loans from the overseas bank one needs to put some assets as surety which should worth the loan amount or greater than the loan amount. The PNB completely overlook this major assurance factor before processing the loan. The other banks and finance minister questions the integrity of PNB insiders for this scam! This elevates the question of how? PNB INSIDER CAN OVERLOOK THIS? Well, some of the Bank Officers are arrested for the same.
Before the loan was sanctioned allegedly Nirav Modi Bribed the bank officers to share the x amount of % from the loan. Hence two bank officers sent a message to the Axis Bank in Hong Kong.
The message is, “Pay the money to the diamond seller who is in Hong Kon”. We are assuring your bank that Nirav Modi will repay the money with interest to your bank in a certain period of time.
If he doesn’t repay, then our bank will repay the money instead of him”. After receiving this message, the Axis Bank in Hong Kong paid the money to the seller. So every year, Nirav Modi started getting the loans without surety in the same process And he is extended the repay deadlines by paying the interest in time. Nirav Modi bought the two officers of Punjab National Bank and got the money that was required for his Jewellery and Diamond Business. This process took place from 2011 to 2017 and got an 11,000 crores rupees loan. How this scam came to the public in 2018? Truth is like fire. At last, it has to come from out of the box.
Here, the same thing happened:
On January 16, 2018, Nirav Modi as usual, went to take a loan to the bank But The old officer was retired. Nirav tried to make deal with a new officer. This time, the new officer was an honest person. The new officer took this affair to his higher officials and tried to understand the loan transaction from 2011 to 2017. As soon as higher official determines the scam they filed a case with CBI. Still, the question Remains HOW loan was Sanctioned of such magnitude?.
CBI started the investigation. In the investigation, they revealed that Nirav Modi obtained 11,000 crores rupees as a loan without enough surety. Now, Punjab National Bank has to pay the loan amount to Axis Bank(Hong Kong).On one side, Nirav had nothing to do Another side, Axis Bank had nothing to do. In between them, PNB got Stuck. PNB has to repay the loan amount to Axis bank. PNB has to collect the money from Nirav to repay to the Axis Bank(Hong Kong)But do they have any assets? compared to loan sanctioned? NO
While reading about the scam or talking about these scams. You will hear 3 technical Terms.
- Buyer’s Credit
These terms are used in banks majorly for import-export business. We should have an understanding of these terms AS the total Nirav Modi Scam was big-time Misuse of these Words…
Buyer’s credit: Axis bank paid the money to the Diamond seller on the behalf of Nirav Modi. That is called Buyer’s Credit.
LOU (Letter of Undertaking): PNB said to Axis bank that Nirav Modi will repay the money with interest in a certain period of time. If he doesn’t repay, then we assure our bank will repay the money with interest. This assurance given by PNB to the Axis Bank is called of letter of undertaking.
SWIFT: we communicate with each other through emails, banks also communicate with other banks through swift messaging software. Our international transactions are happening with this swift messaging software. In this case, PNB officers have to say to overseas Axis Bank to pay the money to the diamond seller. This has to communicate via SWIFT message only. This is a system of exchanging correspondence between Two banks is to ensure safety.
To log in to this software, only authorized people to have permission. So, after receiving a swift message and LOU, axis bank paid the money to the diamond seller Because money transaction is only recorded between axis bank and diamond seller, this scam went undetected up to 7 years. The connection between the Axis Bank and PNB was the only limited swift message and LOU hence the scam was undetected.
So here, criminals are Nirav Modi and those two bank officers who took a bribe from him 58% of India’s wealth is concentrated among 1% population, and the remaining 42% of wealth is concentrated among 99% population. Among every three Indians, one is below the poverty line One thing we have to learn from these scams. There are shortcuts for success it doesn’t last. but Hard work always pays off.
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UK court judge clears billionaire Nirav Modi’s Extradition: On February 25, The UK court had allowed the extradition of diamantaire Nirav Modi to India. You may know who is Nirav Modi? And What he did? Let’s have a quick look at it. Nirav Modi, A 50-Year-old diamond dealer is key accused of one of India’s largest bank scams worth more than 13,000 crores linked to PNB (Punjab National Bank).
He is alleged of securing loans through fake guarantees with his uncle Mehul Choksi and two PNB employees. The ‘Westminster Magistrates’ UK district court granted the petition of India and ordered Nirav Modi to be extradited to India. He will face sets of criminal cases mainly The PNB scam case and money laundering case.
The UK court has confirmed that Nirav Modi was involved in an illegitimate business. Also, the court said that there is evidence upon Nirav Modi to convict about money laundering and defrauding The Punjab National bank. The UK court dismissed the arguments about his mental health concerns. Nirav Modi’s lawyers claimed that he wouldn’t receive a fair trial or justice because the case will be politicized due to his allegations on BJP.
Dismissing these claims also, judge Samuel Goozee said that it is baseless to suggest that he would not receive a fair trial in India. The Extradition trial of India’s wanted fugitive Diamond merchant took a nearly two-year-long legal battle to conclude. Nirav Modi will be in Arthur Road Jail in Mumbai after being brought to India.
A prison cell in Arthur road jail is fully prepared and well set for Nirav Modi in India. He would get some facilities like sufficient security and medical facilities due to his mental health issues and depression inside the prison- The Government of India has provided an assurance letter to Westminster Magistrates court in the UK.
Nirav Modi is behind the bars for two years
Nirav Modi appeared in court via videoconferencing, he is behind the bars of Wandsworth prison in southwest London since March 2019. Nirav Modi fled away from India to the United Kingdom along with his family members in 2018. Nirav Modi was arrested on the behalf of Indian authorities on the Extradition Warrant issue in the United Kingdom on March 19, 2019. He is fighting a legal case against Extradition for two years and since then he is in judicial custody at the Indian Government’s request.
He had petitioned the UK court several times but his bails were rejected Based on the evidence provided by the Enforcement Directorate(ED) and the Central Bureau of Investigation(CBI). Also, Nirav Modi tried to brandish witnesses and destroy evidence against him.
The Extradition order will be sent to the home secretary, Priti Patel
Judge Samuel Goozee will now send the order to the secretary of state for United Kingdom’s Home department, for further action Under the UK Extradition Act 2003. The UK Home Secretary, Priti Patel has to decide within two months. Also, She can seek an extension to approve the order under the India-UK extradition treaty. The order of the Home Secretary barely contradicts the court’s conclusions so Ms. Patel is expected to approve the Extradition order.
Nirav Modi can approach UK high court for permission to appeal against the order,
If UK high court grants the Permission, Nirav Modi has the legal option to appeal against the Extradition order to India. He can challenge and appeal against the order within 14 days period after the order is cleared by the Home department secretary of the UK.
After the orders of Ms. Patel, Nirav Modi Will be very closer to Extradition. This procedure may take months if he files a Petition and it will be granted. If He did not file any petition then he has to be extradited within 28 days of the secretary of state’s order.
Indian government formed a special team of ED and CBI officers to brought diamantaire Nirav Modi Back. All the investing agencies are waiting to return Nirav Modi to India. Because once Nirav extradites to India, he will be inspected for multiple other charges and cases. ED also had attached all the properties in India, UK, USA, Hong Kong, and Thailand of Nirav Modi.
These types of scammers like Nirav Modi, Vijay Mallya, Lalit Modi have looted money from banks just because of some corrupt officers and politicians. And flew out of the country to escape from the law. Every single penny they looted belongs to the people of India, They have to face the law in the end even if it is the law of karma.
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