In what is being termed as one of the biggest scams of corporate India's history, diamond moghul Nirav Modi has been accused of swindling over Rs 11,000 crore from Indian banks.
On Wednesday, Punjab National Bank revealed that it has discovered fraudulent activities in one of its Mumbai branch. The country’s second-largest public sector bank said two of its employees were involved in the scam, where the bank’s core banking system was bypassed to raise payment notes to overseas branches of other Indian banks, including Allahabad Bank, Axis Bank, and Union Bank of India, using the international financial communication system, SWIFT.
The PNB says on the basis of fraudulent Letters of Understanding (LoUs), Nirav Modi and his associates borrowed Rs 280 crore in bank credit and used the same LoUs to raise further capital from other banks.
Also read: Punjab National Bank cautions other banks about modus operandi of Rs 11,400 crore scam
PNB had filed a written complaint against Nirav Modi with CBI on January 31. The law enforcement agency booked him in the cheating case that involved transactions of Rs 280 crore on February 5. However, on Wednesday, the bank revealed that the quantum of the scam is at least 1.71 billion US dollars or over 11,400 crore rupees.
Nirav Modi has been coined as India's youngest billionaire and is deemed close to several powerful people.
Here's all you need to know about Nirav Modi:
Nirav Modi is a luxury diamond jewellery designer. He is the founder of USD 2.3 billion Firestar Diamond and has business spread across three continents from China in Asia to Hawaii Islands in North America.
The Forbes had described Nirav Modi as one of the youngest billionaires of India. He made it to the Forbes' list of billionaires in 2013 and has remained in the exclusive group ever since. In the Forbes' list of billionaires for 2016, Nirav Modi was ranked 1,067 in the world and 46 in India. He was ranked 1,054 globally and 82 in India a year ago.
His designs have been worn to the Oscars by 'Hidden Figures' star Taraji P Henson and to the Golden Globes by Dakota Johnson, among others. Actor Priyanka Chopra is the brand ambassador.
Also read: Bank suspends 10 officials, jewellery designer Nirav Modi under CBI scanner
Nirav Modi grew up in Belgium's Antwerp, the diamond capital of the world. He dropped out of Wharton School of Pennsylvania in the US to take up diamond business. He launched his first flagship store in Delhi in 2014 followed by one in Mumbai, where his firm's headquarters are located.
Opening of his store in New York near Madison Square was attended by Hollywood actor Naomi Watts, Bollywood actors and models Lisa Haydon and Nirmrat Kaur and top fashion model Coco Rocha.
Before PNB's written complaint to CBI, last month, Nirav Modi never faced any legal troubles.
Also read: After PNB fraud, big jewellers Gitanjali, Ginni, Nakshatra also under scanner