Government suspends Nirav Modi, Mehul Choksi's passports

The logo of Punjab National Bank is seen outside of a branch of the bank. | REUTERS

In what could be the biggest banking fraud in India, state-owned PNB had on Wednesday said it detected a Dollars 1.77 billion (about Rs 11,400 crore) scam in which billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders. The official complaint over the $43 million fraud says the two men, along with Modi's wife and brother, worked with a pair of bank employees to get fake "letters of understanding".

Addressing a press conference, Prasad said that the scam started in 2011 when the Congress-led United Progressive Alliance (UPA) government was in power and is the "latest in line in the legacy of corruption and fraudulence left by the Congress Party".

The Congress on Thursday asked the Modi government to come clean on the government's "failure" to prevent the scam and identify those who helped the alleged kingpin, billionaire jeweller Nirav Modi to flee the country.

After the CBI's intervention and PNB's complaint, it was observed that Nirav Modi and his family suddenly dispersed around the world.

PNB, which has assets of $120 billion, disclosed the fraud in a regulatory filing on Wednesday, saying it had referred the matter to law enforcement agencies.

"The stock worth Rs 5100 crore including gold & diamond jewellery, precious stones etc recovered during the searches were seized under PMLA", the agency said in a statement.

The Central Bureau of Investigation (CBI) had received the complaint from PNB on January 28 and a case was registered on January 31.

"If the entire onus is on us, we will take responsibility", Mehta said, adding the bank has taken action to book culprits and protect its financial interests. While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on LoUs issued by PNB. Ltd. head office in Bharat Diamond Bourse in the Bandra Kurla Complex, Modi's private office at Kohinoor City in Kurla West, his showroom and boutique at ITTS House in Fort, South Mumbai and a workshop in the Peninsula Business Park in Lower Parel.

Now when the three firms approached PNB in January this year for buyers credit, they were denied.

In noon trade on Friday, PNB's share was down 3 per cent after sliding more than 18 per cent in the previous two sessions.

Prasad said the government would revoke his passport, but the prominent jeweler reportedly left India in early January and is believed to be in Switzerland.

Modi, the son and grandson of diamantaires, grew up in Antwerp, according to his website.

The 48-year-old billionaire diamond merchant was ranked 85 in the Forbes' list of the richest Indians in 2017.

Nirav Modi could be seen in the group photo which also features PM Modi.

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