One of Hollywood's favorite diamond dealers has vanished amid an epic Indian fraud case
Activists of the youth wing of India’s main opposition party burn a cutout image of billionaire jeweler Nirav Modi during a protest Friday in Mumbai. (Francis Mascarenhas/Reuters)
For years, Hollywood and Bollywood A-listers have sought out Nirav Modi and his diamonds.
The self-described haute diamantaire, a descendant of a family of jewel merchants who launched his own brand in 2010, has been draping actresses such as Naomi Watts, Taraji P. Henson and Lisa Haydon in shiny things for years. His name graces stores in New York, Japan and Mumbai.
But this month, a different set has been looking for the billionaire: investigators with questions and warrants who want to ask one of India’s richest men about what may be the biggest bank scam in the country’s history.
Modi, 47, is at the center of a sprawling investigation involving the government-run Punjab National Bank and what investigators call the “wrongful loss” of some $1.8 billion, the result of what the government says is seven years’ worth of bogus transactions.
The bank’s complaint says Modi, his wife, brother and business partner worked with two bank employees, according to the Associated Press. The bank filed the criminal complaint on Jan. 31.
News of the case is sparking anger and protests across India and shaking confidence in the government and its publicly funded lending agencies.
But investigators have another problem on their hands. They do not know where Modi is.
Unconfirmed rumors say he is in Dubai or New York. But all that is clear is that he has not been in India since Jan. 1, even as the controversy has swirled.
According to Forbes, executives at Punjab National Bank are accused of colluding with Modi and his associates to issue “letters of undertaking,” an instrument that says the bank would cover a customer if they are unable to repay a loan. On the basis of those letters, other banks gave Modi and his associates overseas loans for which they otherwise would not have been eligible, investigators say.
Modi has not been formally charged, although several high-level employees in his company and at the bank have been arrested, according to the Hindustan Times. Authorities have also suspended Modi’s passport. Modi has ignored a summons to answer questions.
Wherever he is, he has access to email. On Tuesday, he penned a goodbye letter of sorts to thousands of his employees, saying that he was innocent of any crime but that because the government has frozen his business assets, he will not be able to pay them and that they should seek new jobs, according to the Hindustan Times.
“As of now, because of seizure and removal of all stocks in factories and showrooms, and freezing of bank accounts, we shall not be in a position to pay your dues, and it would be right on your part to look for other career opportunities,” he wrote in the email sent on Tuesday, which was seen by the Hindustan Times. “The near future is uncertain.”
The Indian government’s Enforcement Directorate, which investigates financial crimes, launched its own information campaign. It turned its Twitter feed into Nirav Modi central, saying it had frozen Modi’s company accounts and seized many of his assets.
Those assets, judging by tweeted photos, include a lavish list of billionaire playthings: a Rolls-Royce Ghost, a Porsche Panamera and two Mercedes-Benzes.
ED seizes 9 cars including Rolls Royce Ghost, Porsche Panamera, 2 Mercedes Benz, 3 Honda, 1Toyota Fortuner & an Innova of Nirav Modi & his companies. Shares & Mutual Funds worth Rs 7.8 Cr of Nirav Modi & Rs 86.72 crore of Mehul Choksi group also frozen. pic.twitter.com/lolYF8CgB9
— ED (@dir_ed) February 22, 2018
Investigators have also targeted other things of value owned by Modi and his company. Among them: a “huge quantity of imported watches” and 21 pieces of property, including a farmhouse in Alibaug, a town on the Arabian sea, and a solar power plant.
The government’s statements have not done much to stem accusations and protests over the past month, including some where effigies of Modi were burned. The demonstrators’ animus was summed up by a sign many of them held: Modi robs India.
But their ire was not just directed at the missing billionaire.
Spotted a Punjab National Bank ATM. pic.twitter.com/AOGDBJfPuy
— Trendulkar (@Trendulkar) February 16, 2018
Don’t take a home loan for ₹30 Lakh.
They ask you to pay it back.
Take a loan for ₹3000 Crores.
That’s a write-off.
— Sorabh Pant (@hankypanty) February 16, 2018
Some politicians have criticized Prime Minister Narendra Modi (he is not related to Nirav Modi) for the failure to detect India’s largest bank scam earlier, even though it happened at a state-owned bank, Forbes wrote. The government has also taken heat for allowing Nirav Modi to leave the country in the first place.
Not helping things is that the last known photo of Modi shows him grinning near the Indian prime minister. He was part of a delegation of Indian business people who went to Davos, Switzerland, for the World Economic Forum in late January.
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#PublicMoneyLootpic.twitter.com/gQQnKQNjDo
— Sitaram Yechury (@SitaramYechury) February 15, 2018
His lawyer claims he is not on the run. He says Modi is traveling for business.
But as Yahoo Finance reported, the Indian government summed up the needle-in-a-haystack aspect of the search for Modi in four words:
“He can be anywhere.”