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Nirav Modi was arrested a short while ago in London. 13 months ago, it came to light that celebrity diamantaire Nirav Modi and his uncle Mehul Choksi had defrauded <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> (PNB), India’s second-largest state-owned bank, of more than <a href="https://www.businessinsider.in/here-are-the-main-findings-from-punjab-national-banks-internal-investigation-into-the-2-billion-nirav-modi-scam/articleshow/64681851.cms">₹143 billion ($2.1 billion)</a>. By using illegal letters of guarantee procured through PNB’s Brady House branch in Mumbai, the pair and their affiliates had taken loans from the overseas branches of a number of Indian banks since 2011 and had subsequently defaulted on them. A warrant for Modi’s arrest was issued by a Westminister Court on March 18th. The warrant came a week after he was spotted on the streets of London with a full beard. Here is how the events leading up to his arrest unfolded. Early January 2018: Nirav Modi reportedly <a href="https://www.tribuneindia.com/news/nation/nirav-modi-fled-india-on-jan-1/544819.html">leaves India</a>. January 29th, 2018: Punjab National Bank filed a complaint with the CBI alleging that Nirav Modi, his uncle Mehul Choksi and their associates had swindled the bank through transactions at its Brady House branch in Mumbai. February 15th, 2018: India’s Enforcement Directorate registers a money laundering case against Nirav Modi and his associates under the Prevention of Money Laundering Act. Early March 2018: The UK’s Serious Fraud Office <a href="https://www.ndtv.com/india-news/why-nirav-modi-wanted-in-india-is-roaming-the-streets-of-london-2006007">confirms</a> to India in early March that Nirav Modi is in London. April 5th, 2018: Regulators in Belgium <a href="https://www.thehindu.com/news/national/pnb-fraud-case-belgium-freezes-two-nirav-modi-accounts-on-ed-request/article23440305.ece?utm_source=pushnotifications&amp;utm_campaign=pushnotifications)">freeze </a>the two bank accounts of Modi after a request from the ED to do so. April 8th, 2018: A court in Mumbai issues <a href="https://www.ndtv.com/india-news/non-bailable-warrant-issued-against-nirav-modi-mehul-choksi-in-pnb-scam-1834399">non-bailable arrest warrants</a> for Modi and Choksi at the CBI’s request. June 13th, 2018: The CBI approached Interpol to issue a red notice against Modi and Choksi. A red notice is a request to locate and arrest a criminal on the run, but not an international arrest warrant. June 29th, 2018: Interpol issues <a href="https://indianexpress.com/article/india/nirav-modi-pnb-fraud-case-arrest-close-as-cbi-sends-extradition-plea-to-uk-5316602/">a red corner notice</a> against Modi, thereby enabling the cooperation of international police. August 20th 2018: The extradition process against Nirav Modi <a href="https://www.businessinsider.in/billionaire-fugitive-nirav-modi-could-be-arrested-in-the-uk-as-soon-as-this-week/articleshow/65483882.cms">is initiated</a>. An application is lodged with the UK Home Office. However, the application is reportedly missing certain documents, which causes <a href="https://www.ndtv.com/india-news/waiting-for-uk-to-respond-to-extradition-request-says-india-after-nirav-modi-seen-in-london-2005117">proceedings</a> to be delayed. October 1st, 2018: The ED seizes around <a href="https://www.indiatoday.in/business/story/assets-of-nirav-modi-worth-rs-637-crore-seized-by-ed-1353236-2018-10-01">₹6.4 billion </a>of Nirav Modi’s assets. This includes properties in India and abroad as well as jewelry and bank deposits. March 8th, 2019: The UK Home Office certified India’s extradition request, deeming Nirav Modi’s case “fit for extradition”. The case was then transferred to the District Court in Westminister, which had to issue the summons. March 9th, 2019: The Telegraph, a UK daily, <a href="https://www.telegraph.co.uk/news/2019/03/08/exclusive-indias-wanted-man-nirav-modi-accused-15bn-fraud/">broke the news </a>that Nirav Modi was living in London. The newspaper said it had tracked Modi down to his £8 million (₹726 million) flat in London’s West End. SEE ALSO: <a href="https://www.businessinsider.in/billionaire-fugitive-nirav-modi-could-be-arrested-in-the-uk-as-soon-as-this-week/articleshow/65483882.cms">Billionaire fugitive Nirav Modi could be arrested in the UK as soon as this week</a> <a href="https://www.businessinsider.in/india-presses-new-charges-against-diamond-merchant-nirav-modi-and-wife-ami-in-alleged-money-laundering-case/articleshow/68367950.cms">India presses new charges against diamond merchant Nirav Modi and wife Ami in alleged money laundering case</a> <a href="https://www.businessinsider.in/here-are-the-main-findings-from-punjab-national-banks-internal-investigation-into-the-2-billion-nirav-modi-scam/articleshow/64681851.cms">Here are the main findings from Punjab National Bank’s internal investigation into the $2 billion Nirav Modi scam</a>

Here’s how the 13-month chase for Nirav Modi came to an end

<ul><li>They said the 'red notice' has been issued by the global police body on the request of the Enforcement Directorate (ED). </li><li>Once such a notice issued against a fugitive, the Interpol asks its 192-member countries to arrest or detain the person if spotted in their countries after which extradition or deportation proceedings can begin. </li><li><keyword id="6243034" type="PERSON" weightage="20" keywordseo="ami-modi">Ami Modi</keyword> is stated to have left country soon after the alleged bank fraud case came into light in 2018. </li></ul>An Interpol global arrest warrant has been issued against Ami Modi, wife of <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, prime accused in the over USD 2 billion <keyword id="47268" type="ORGANIZATION" weightage="20" keywordseo="PNB">PNB</keyword> bank fraud case, on charges of money laundering, officials said on Tuesday. They said the 'red notice' has been issued by the global police body on the request of the Enforcement Directorate (ED). Once such a notice issued against a fugitive, the Interpol asks its 192-member countries to arrest or detain the person if spotted in their countries after which extradition or deportation proceedings can begin. Ami Modi is stated to have left country soon after the alleged bank fraud case came into light in 2018. The ED has charged Ami Modi for conspiring and money laundering with her husband and jeweller Nirav Modi apart from his uncle Mehul Choksi and others under the Prevention of Money Laundering Act (PMLA). Nirav Modi (49), is currently lodged in a UK jail after being arrested in London in March, 2019 and is currently fighting extradition to India. He has been declared a fugitive economic offender by a Mumbai court early this year and the court had also ordered confiscation of his assets. The ED has already confiscated about Rs 329 crore of his linked properties. The businessman, Choksi and others are being probed by the ED on money laundering charges in connection with an over USD 2 billion alleged bank fraud at a PNB branch in Mumbai. Similar Interpol notices have been earlier been issued against Nirav Modi's younger brother Nehal Modi and sister Purvi Modi.

Interpol issues red notice against Ami Modi, the wife of fugitive Nirav Modi, over $2 billion PNB fraud case

<ul><li>The income tax department of India recovered ₹ 548 million from the paintings owned by <keyword id="6242396" type="UNKNOWN" weightage="20" keywordseo="PNB-scam">PNB scam</keyword> accused Nirav Modi. </li><li>The department targeted a value of ₹970 million from the auction event held in Mumbai. </li><li>Camelot Enterprises, Nirav Modi’s company has filed a petition in the Bombay High Court for auctioning the paintings — calling the move unlawful.</li></ul>A few days ago, Punjab National Bank(PNB) scam accused Nirav Modi was arrested in London. The income tax department of India, today, auctioned the seized artwork paintings at the Saffron Art Gallery in Mumbai. <a href="https://www.indiatoday.in/india/story/nirav-modi-paintings-go-under-hammer-fetch-over-rs-54-crore-for-income-tax-department-1487311-2019-03-27">According to media reports</a>, the government recovered nearly ₹548 million by selling 55 of the 68 paintings during the bidding session that went on for more than two hours. However, the income tax department expected to recover ₹970 million from the event. The collection, in total, fetched ₹609 million. The auction included bidders from London, New York and New Delhi among others, bidding online for the paintings. As the auction took place, on Wednesday, Camelot Enterprises. Nirav Modi’s company, has filed a petition against the auction of paintings in the Bombay High Court calling the move unlawful. The company also said a few of those paintings are actually company’s assets, demanding to restrict the auction. Ranging from thousands to millions, the paintings were the artwork by renowned Indian painters including Raja Ravi Verma, FN Souza, Jogen Chowdhury, VS Gaitonde and Akbar Padamsee. For instance, Raja Ravi Verma’s oil on canvas from 1881 was sold at ₹140 million. Of the 55 painting sold during the auction, the highest amount fetched from a painting was recorded at ₹220 million and nearly 10 paintings touched the ₹<a href="https://indianexpress.com/article/india/nirav-modi-in-london-prison-his-art-under-mumbai-hammer-i-t-recovers-rs-54-8-crore-5644486/">10 million mark</a>. While, the 13 unsold paintings include a few by Chinese painters including a Miao Xiaochun piece. The paintings were sold at a Goods &amp; Services Tax (GST) of 12% along with a 15% commission for the auction house. Nirav Modi’s legal team is expected to file the second bail application in the UK court on Friday since he denied the first bail application on March 20. The CBI will send a team to Londom for the hearing on 29 March, ANI reported. Earlier, the ED reportedly <a href="https://www.businessinsider.in/nirav-modi-arrested-in-london/articleshow/68496650.cms">seized around</a> ₹6.4 billion from Nirav Modi’s assets including his property, bank deposits and jewellery. See also: <a href="https://www.businessinsider.in/nirav-modi-arrested-in-london/articleshow/68496650.cms">Here’s how the 13-month chase for Nirav Modi came to an end</a> <a href="https://www.businessinsider.in/india-presses-new-charges-against-diamond-merchant-nirav-modi-and-wife-ami-in-alleged-money-laundering-case/articleshow/68367950.cms">India presses new charges against diamond merchant Nirav Modi and wife Ami in alleged money laundering case</a>

India has seized over ₹548 million worth of paintings from Nirav Modi’s art collection including prized work by VS Gaitonde

<ul><li>The Ministry of Home Affairs has empowered the <keyword id="107956" type="ORGANIZATION" weightage="20" keywordseo="Serious-Fraud-Investigation-Office">Serious Fraud Investigation Office</keyword> (SFIO) to request the issuance of look-out-circulars (<keyword id="6355098" type="UNKNOWN" weightage="20" keywordseo="LoC">LOC</keyword>) against people who are suspected of defaulting on large loans. </li><li>Last week, the same power was also granted to the CEOs of India’s public-sector banks, which have largely been the major casualties of these frauds and loan defaults. </li><li>Prior to these changes, the ability to request for LOCs was mainly extended to police authorities, the CBI, Enforcement Directorate, the home and external affairs ministries as well as regional passport offices and customs and tax officials. </li></ul>In the wake of a series of high profile banking scams and loan defaults this year, the most notable of which is <a href="https://www.businessinsider.in/here-are-the-main-findings-from-punjab-national-banks-internal-investigation-into-the-2-billion-nirav-modi-scam/articleshow/64681851.cms">the Nirav Modi case</a>, the Indian government is trying to make it easier to prevent fraudsters from escaping the country and taking up residence elsewhere. To this effect, the Ministry of Home Affairs has empowered the Serious Fraud Investigation Office (SFIO), which is housed under the corporate affairs ministry, to request the issuance of <a href="https://indianexpress.com/article/india/centre-gives-sfio-powers-to-stop-defaulters-from-fleeing-the-country-5468015/">look-out-circulars </a>(LOC) against people who are suspected of defaulting on large loans. Last week, the same power was also granted to the<a href="https://www.livemint.com/Politics/lAjlD5SnzGYkS87SyKxVJI/Govt-authorises-public-sector-bank-CEOs-to-request-for-look.html"> CEOs of India’s public-sector banks</a>, which have largely been the major casualties of these frauds and loan defaults. However, as these public-sector banks aren’t official investigation agencies, the LOCs requested by them can be challenged in court. That is not the case with the SFIO. Prior to these changes, the ability to request for LOCs was mainly extended to police authorities, the CBI, Enforcement Directorate, the home and external affairs ministries as well as regional passport offices and customs and tax officials. A major reason why wilful defaulters like <keyword id="14678" type="PERSON" weightage="20" keywordseo="Vijay-Mallya">Vijay Mallya</keyword>, <keyword id="571991" type="COMPANY" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> and Mehul Choksi were able to flee India for safer havens was because the agencies or entities that caught wind of their crimes did not have the authority to prevent them from fleeing and had to follow protocols and notify higher powers with said authority. By the time formal channels of communication were activated, it was too late. This is reportedly what happened in the case of Vijay Mallya, who fled India in March 2016. The CBI actually <a href="https://www.hindustantimes.com/india/cbi-ignored-immigration-alert-on-mallya-leaving-india-on-march-2/story-hW83mkAc6qVe14VyFVOIFJ.html">watered-down the LOC</a> it had filed against the liquor baron in October 2015 from “detain” to “inform” after citing a lack of evidence and Mallya’s supposed intention to cooperate, which eventually allowed him to leave the country. The CBI had actually taken over the case from the SFIO, which had been looking into the diversion of funds at Mallya’s companies in September 2015. By broadening the number of stakeholders that can ask for the arrest of a <keyword id="2168141" type="PERSON" weightage="20" keywordseo="Wilful-defaulter">wilful defaulter</keyword>, the move could decrease the chances of this happening again in the future, especially in instances where investigations by the police and CBI are hamstrung by “conflicts of interest” or they don’t follow through with arrests. A few months ago, the central government also passed the <a href="https://www.businessinsider.in/india-takes-its-first-big-step-towards-avoiding-future-nirav-modi-vijay-mallya-like-scams/articleshow/65069668.cms">Fugitive Economic Offenders Act</a>. The law allows the Enforcement Directorate to seize the domestic as well as foreign assets of “economic offenders” who have left the country so their creditors may recover their dues. The crimes involve amounts of ₹1 billion or more. SEE ALSO: <a href="https://www.businessinsider.in/india-takes-its-first-big-step-towards-avoiding-future-nirav-modi-vijay-mallya-like-scams/articleshow/65069668.cms">India takes its first big step towards avoiding future Nirav Modi, Vijay Mallya-like scams</a> <a href="https://www.businessinsider.in/here-are-the-main-findings-from-punjab-national-banks-internal-investigation-into-the-2-billion-nirav-modi-scam/articleshow/64681851.cms">Here are the main findings from Punjab National Bank’s internal investigation into the $2 billion Nirav Modi scam</a> <a href="https://www.businessinsider.in/liquor-baron-vijay-mallya-will-be-the-first-to-be-tried-under-indias-new-fugitive-economic-offenders-ordinance/articleshow/64635569.cms">Liquor baron Vijay Mallya will be the first to be tried under India’s new Fugitive Economic Offenders Ordinance</a>

India’s corporate fraud investigation agency and the CEOs of state-owned banks can now directly prevent scamsters from leaving the country

New Delhi, Feb 27 () Regulator Sebi on Thursday slapped a total fine of Rs 5 crore on fugitive businessman Mehul Choksi, Gitanjali Gems and another individual for violating various regulations, including listing norms. Choksi, the maternal uncle of diamantaire Nirav Modi, is the promoter and managing director of Gitanjali Gems. Nirav Modi, who has allegedly defrauded state-run Punjab National Bank of over Rs 14,000 crore, is currently lodged in a British jail. In an order, Sebi said it is imposing a fine totalling Rs 5 crore on Choksi, Gitanjali Gems and its Executive Director Dhanesh Sheth. "... the default is grave and the gravity of this matter cannot be ignored," Sebi said. "I am of the considered opinion that the deliberate defiance of the mandatory obligations and hiding the crucial and material information from investors, regulators and stock exchange, as found in this case should be dealt with sternly and the penalty in such cases should serve as effective deterrence," Sebi Adjudicating Officer Santosh Shukla said in a 28-page order. RAM SRS ABMABM

Sebi imposes Rs 5 cr fine on Mehul Choksi, Gitanjali Gems, another individual

<ul><li>The <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> <keyword id="41357" type="COMPANY" weightage="20" keywordseo="Scam">scam</keyword> is technology vs human ingenuity. </li><li>It's not a cybercrime, but it's certainly a bank heist.</li><li>Bankers and Modi's staff misused the <keyword id="6360068" type="PERSON" weightage="20" keywordseo="swift">SWIFT</keyword> system to build a $1.6 billion scam.</li></ul> Technology is only as strong as the humans using it. That pretty much sums up the Nirav Modi scam that came to light last week. The parties involved misused the Society for Worldwide Interbank Financial Telecommunications (SWIFT) money transfer system, and their personal positions within <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> to build a $1.6 billion (or more) scam. At its core, the Nirav Modi scam is a hack, though it can't really be labeled as cybercrime. <keyword id="6242884" type="PERSON" weightage="20" keywordseo="gokulnath-shetty">Gokulnath Shetty</keyword>, deputy branch manager at a <keyword id="47268" type="ORGANIZATION" weightage="20" keywordseo="PNB">PNB</keyword> branch in South Mumbai, had the passwords required to log into the SWIFT system. That allowed him to effectively game the system in favour of Modi's firms. But what is SWIFT? And how is a password enough to send $ 1.6 billion down the drain? The anatomy of a bank heist When money is transferred overseas, banks inform the same to the country's treasury. The treasury then informs another country's treasury, which in turn tells the bank in that other country to transfer the funds. But, as powerful as the treasury is, it cannot do so without a branch manager's consent. The branch manager in question here is the bank branch that originally got the transfer request. This consent (from the bank's branch manager) is issued through SWIFT messages. You could call it the world's most powerful messaging system. SWIFT is an inter-bank messaging system that doesn't transfer any money but informs banks around the world that loans or fund transfers have been authorised. SWIFT messages are sent in set formats and hold information relevant to a particular transfer. In the Nirav Modi scam, the Letters of Understanding (LoU) in question were issued through SWIFT. Unlike the $81 million Bangladesh Bank hack of 2016, there was no malware involved in this case. The malware here were humans, armed with passwords. A CBI source told <a href="https://thewire.in/225297/nirav-modis-team-given-unauthorised-access-pnb-systems-cbi-sources/" data-type="tilCustomLink">The Wire</a> that - "Modi's staff were logging into the SWIFT system using passwords of PNB officials, including Shetty, in the capacity of verifier/authoriser and enabling the fraudulent SWIFT messages." What this means is that the accused were issuing and approving the consent of their own accord. Core Banking System (CBS) But there's a failsafe for that as well. Consent issued via SWIFT are eventually supposed to tie in with a bank's core system. This is the technology allowing various bank branches to inter-operate. The Core Banking System and the SWIFT system are separate systems, requiring manual input for SWIFT messages into the CBS. This is where PNB's oversight comes into the picture. A LoU issued via the SWIFT system is supposed to be manually entered into the CBS at some point. Somehow, no one did that, and no one asked either. The result? $ 1.6 billion or more in the hands of diamond sellers. (Image courtesy: PTI)

Nirav Modi Scam: How to game an age-old banking system for $1.6 billion

<ul><li>Number of bad loans alone was close to $149 billion last year.</li><li> <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> and his uncle Mehul Choksi allegedly defrauded Punjab National Bank of over <a href="http://www.thehindu.com/business/Industry/all-you-need-to-know-about-nirav-modi-and-the-177-billion-pnb-fraud/article22753973.ece" data-type="tilCustomLink">₹1.77 billion</a>. </li><li>According to proxy advisory firm Institutional Investor Advisory Services (IiAS), in 2016-17 alone the Indian banking sector reported 12,553 frauds aggregating to Rs 181.7 billion. </li></ul> India’s already troubled banking sector is being demolished by the surging number of bad loans and/or bank frauds that are coming to light. Though this is not at all a new phenomenon, the Nirav Modi case has opened up a Pandora’s box full of dodgy transactions -- that typically involves cases where the borrower intentionally tries to deceive the lending bank and does not repay the loan -- that run in millions and even billions. As a result of which, the CBI is on an overdrive to nab these offenders. According to data from the Reserve Bank of India (RBI), accessed through a right-to-information request by a <a href="https://in.reuters.com/article/india-banks-fraud/exclusive-unpublished-data-shows-indias-fraud-problems-extend-far-beyond-pnb-idINKCN1G00SJ">Reuters</a> reporter, in the five financial years leading up to 31 March 2017 showed that state-run banks reported 8,670 “loan fraud” cases totalling ₹612.6 billion. And the number of bad loans alone was close to a whopping <a href="https://www.ndtv.com/india-news/unpublished-data-shows-indias-fraud-problems-extend-far-beyond-pnb-1813569" data-type="tilCustomLink">$149 billion</a> last year. According to proxy advisory firm Institutional Investor Advisory Services (IiAS), in 2016-17 alone the <a href="https://www.firstpost.com/business/frauds-cost-rs-18170-cr-in-12553-cases-to-banking-sector-in-fy17-advisory-firm-report-4411267.html">Indian banking sector reported 12,553 frauds aggregating to Rs 181.7 billion</a>. Here’s are of the biggest frauds that came to light in the past financial year. Kanishk Gold Pvt Ltd./consortium of 14 banks led by <keyword id="6354731" type="UNKNOWN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> (SBI): Kanishk Gold Pvt Ltd. has been <a href="https://timesofindia.indiatimes.com/business/india-business/jewellery-chain-kanishk-gold-defrauds-14-banks-to-tune-of-rs-824-15-crore/articleshow/63394221.cms" data-type="tilCustomLink">accused</a> by a consortium of 14 banks led by SBI of defaulting on a loan of ₹8241.5 million. While the principal loan amount is about ₹8241.5 million, adding the interest due would indicate a loss of more than ₹10 billion. In a letter dated 25 January 2018 to the CBI, SBI charged Kanishk with "manipulating records, shutting shop overnight." Nirav Modi / <keyword id="6476298" type="UNKNOWN" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank:</keyword> The all-too-famous case in which companies owned by billionaire jeweller Nirav Modi and his uncle Mehul Choksi allegedly defrauded India's second-biggest state-run bank of over <a href="http://www.thehindu.com/business/Industry/all-you-need-to-know-about-nirav-modi-and-the-177-billion-pnb-fraud/article22753973.ece" data-type="tilCustomLink">₹1.77 billion</a>, making it India's biggest detected loan fraud. Apparently, two junior officers at a single branch had illegally issued fraudulent “letters of undertaking” (a guarantee that a bank is obliged to repay the loan if the actual borrower fails) without any collateral to the accused. When the accused failed to pay up, the bank employees involved issued more LoUs on behalf of PNB, asking other banks to give out fresh loans to the firms. The Central Bureau of Investigation (CBI) registered the case on 31 January 2018. Vikram Kothari / consortium of 7 banks led by Bank of India: The CBI arrested <keyword id="5888255" type="COMPANY" weightage="20" keywordseo="Rotomac">Rotomac</keyword> owner Vikram Kothari and his family in the alleged “willful” loan default to the tune of ₹ 36950 million on 22 Feb 2018. As alleged, the case relates to bank loans <a href="https://thewire.in/banking/banking-sector-hit-second-scam-rs-3695-cr-rotomac-promoters-probed" data-type="tilCustomLink">worth ₹ 29190 million</a> from 2008 onwards taken by Mr Kothari’s companies from a consortium led by Bank of India and comprising Bank of Baroda, Indian Overseas Bank, Union Bank of India, Allahabad Bank, Bank of Maharashtra and Oriental Bank of Commerce. This amount inflated to ₹ 36950 million after including accrued interest, because of repeated defaults on payment. Dwarka Das Seth International Pvt Ltd / Oriental Bank of Commerce: On 24 February 2018, the CBI registered a case against Delhi-based diamond exporter, Dwarka Das Seth International Pvt Ltd, for an alleged <keyword id="77600" type="PERSON" weightage="20" keywordseo="bank-fraud">bank fraud</keyword> to the tune of <a href="https://economictimes.indiatimes.com/news/politics-and-nation/cbi-approaches-interpol-to-locate-promoter-of-dwarka-das-seth-jewellers/articleshow/63129931.cms" data-type="tilCustomLink">₹3898.5 million</a>. The company was supposedly using letters of credit (LoCs) to pay off other creditors against the purchase of gold and other precious stone and transfer gold and funds outside the country using fictitious transactions. The company was also engaging in business transactions with non-existent entities, it said. Totem Infrastructure Ltd / consortium of eight banks led by Union Bank of India: CBI arrested the promoters of Totem Infrastructure Ltd — Tottempudi Salalith and Tottempudi Kavita — on 23 March 2018 in connection with an alleged <a href="https://timesofindia.indiatimes.com/business/india-business/cbi-arrests-promoters-of-totem-infra-in-rs-1394-crore-fraud-case/articleshow/63433753.cms" data-type="tilCustomLink">₹13940 million</a> fraud perpetrated against a consortium of eight banks. They were also accused of using the funds that were loaned to them for purposes other than what they were meant for. Aircel promoter C Sivasankaran and more / IDBI Bank: The CBI on Thursday (26 April 2018) registered a case against 15 former and serving senior IDBI Bank officials along with 24 others including former Aircel promoter C Sivasankaran, the heads of two public sector banks — Melwyn Rego of Syndicate Bank and Kishor Kharat of Indian Bank — and former CMD of IDBI Bank M S Raghavanand in an alleged <a href="http://www.thehindu.com/business/Industry/idbi-bank-fraud-case-cbi-books-indian-bank-and-syndicate-bank-chiefs-aircel-founder/article23684141.ece" data-type="tilCustomLink">₹6-billion</a> bank fraud case. The CBI claims loans worth ₹3220 million and ₹5230 million were given to Sivasankaran’s two offshore companies – Axcel Sunshine Limited (British Virgin Islands) and Finland-based Win Wind Oy respectively – which turned non-performing assets.

Here are the biggest bank frauds that happened in India the previous financial year

<ul><li>A Hyderabad civil court passed the stay order on a petition filed by Raju, who was released on bail in 2018. He sought orders to restrain <keyword id="128682" type="COMPANY" weightage="20" keywordseo="Netflix">Netflix</keyword> from releasing the web series on the ground that it would invade his privacy in an unlawful manner.</li><li>Raju also claimed that the narrative contained half-truths and palpably designed to bring down his reputation.</li><li>Netflix released the trailer of the web series which is about Vijay Mallya, Nirav Modi, Subrata Roy and <keyword id="41263" type="PERSON" weightage="20" keywordseo="Ramalinga-Raju">Ramalinga Raju</keyword>.</li></ul> A court in Hyderabad on Tuesday restrained Netflix from releasing web series "<keyword id="9827211" type="UNKNOWN" weightage="20" keywordseo="bad-boy-billionaires">Bad Boy Billionaires</keyword>: India" on the life story of Satyam Computer Services founder B. Ramalinga Raju who was convicted in Satyam scam and three others. A Hyderabad civil court passed the stay order on a petition filed by Raju, who was released on bail in 2018. He sought orders to restrain Netflix from releasing the web series on the ground that it would invade his privacy in an unlawful manner. Raju also claimed that the narrative contained half-truths and palpably designed to bring down his reputation. Netflix has already released the trailer of the web series which is about Vijay Mallya, Nirav Modi, Subrata Roy and Ramalinga Raju. "What would you do to make it to the top? To build an empire? To maintain an image? Bad Boy Billionaires answers just that. Dive into the stories of India's most infamous billionaires - Vijay Mallya, Nirav Modi, Subrata Roy, and Byrraju Ramalinga Raju as they plan, plot and maneuver through their rises and falls. Watch as insiders and experts discuss what made these men genius and, in some cases, the greatest conmen," reads the description by Netflix. A court in Bihar had last week restrained Netflix from using Subrata Roy's name in the web series. The over Rs 7,000 crore Satyam scam came to light on January 7, 2009 when Ramalinga Raju confessed that the company's account books and profits were inflated over many years to the tune of several crores of rupees. Police arrested him two days later on a complaint by some shareholders. The CBI filed three charge sheets against Raju and the other accused, charging them with cheating, criminal conspiracy, forgery, falsification of accounts and breach of trust. A special CBI court in April 2015 had sentenced him, his two brothers and seven others to seven years in prison in the case, said to be India's biggest corporate fraud. However, a month later, the metropolitan sessions court suspended their sentence and granted them bail. SEE ALSO: <a href="https://www.businessinsider.in/india/news/icj-raises-concern-on-sc-decision-in-bhushan-case-says-its-inconsistent-with-international-standards/articleshow/77885669.cms">ICJ raises concern on SC decision in Bhushan case — says it’s inconsistent with international standards</a>

Hyderabad Court stays release of Netflix's Bad Boy Billionaires: India following Ramalinga Raju's objections

<ul><li>Last week, Interpol’s bureau in Manchester asked the CBI to issue an <keyword id="82903" type="ORGANIZATION" weightage="20" keywordseo="extradition">extradition</keyword> request and provisional arrest warrant for Modi, who is currently living in the UK. </li><li>The extradition request paves the way for Modi’s immediate arrest and presentation before a court. </li><li>Meanwhile, Modi’s fellow conspirator in the case, <keyword id="2763" type="PERSON" weightage="20" keywordseo="Mehul-Choksi">Mehul Choksi</keyword> has taken up citizenship of Antigua. An application for his international arrest warrant is still pending with Interpol. </li></ul>Ever since the $2 billion <keyword id="38935" type="PERSON" weightage="20" keywordseo="Fraud">fraud</keyword> case at <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> came to light in February 2018, the protagonist behind the scam, <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, has remained a free man. Following a request to Interpol from the Central Bureau of Investigation (CBI) to issue a red corner notice, or an international arrest warrant, against him, the absconding billionaire was reported to be seen in Brussels in June. Like fellow wilful defaulter Vijay Mallya, Modi was subsequently confirmed to be living in the UK, where he has reportedly applied for political asylum. And now, it looks like he could soon be arrested, even as early as this week, according to a report by the Indian Express. Last week, Interpol’s bureau in Manchester asked the CBI to issue an extradition request and provisional warrant for Modi’s arrest. A spokesperson for the CBI, Abhishek Dayal, confirmed to news outlets that the extradition request was sent yesterday to authorities in the UK via the Ministry of External Affairs. The extradition request paves the way for Modi to be immediately arrested in the UK and eventually stand before a court. Earlier this month, India’s Enforcement Directorate, a federal agency tasked with fighting economic crimes, also sent an arrest warrant and extradition request to UK authorities in relation to the Nirav Modi scam. Modi is not the only person of interest in the case. The CBI has also filed chargesheets against his fellow conspirator, Mehul Choksi - whose also his uncle, as well as his wife, Ami Modi and son, Nishal. All left India in January, shortly before the scam was revealed. Despite the revocation of his passport, Modi was believed to be travelling on a passport issued by Singapore. Meanwhile, Choksi is said to have taken up citizenship of Antigua, an island in the Caribbean. A request for his extradition was handed over to officials in Antigua and Barbuda at the beginning of August. However, given the absence of a extradition treaty between India and Antigua, the only way for Indian authorities to extradite Choksi is to get Interpol to issue a red corner notice against him. The application for Choksi’s international arrest warrant is reported to be still pending with Interpol. Separately, on August 20th, a special CBI court granted bail to Usha Ananthasubramanian, who was the managing director and CEO of Punjab National Bank when the scam took place. Prior to the fraud case coming to light, Ananthasubramanian was the MD and CEO of Allahabad Bank, a role which she was eventually forced to relinquish. She was named in a chargesheet for failing to properly prevent the fraudulent letters of undertaking from being issued by the bank.

Billionaire fugitive Nirav Modi could be arrested in the UK as soon as this week

<ul><li>On July 20th, the lower house of India’s <keyword id="6354721" type="ORGANIZATION" weightage="20" keywordseo="parliament">Parliament</keyword> passed the Fugitive Economic Offenders Bill. </li><li>The bill allows the government to seize the domestic as well as foreign assets of “economic offenders” who have left the country so their creditors may recover their dues. </li><li>In addition to loan defaults and money laundering, the crimes that fall under the purview of the bill include tax evasion and the use of black money. </li></ul>With the multi-million dollar frauds of Vijay <keyword id="6373968" type="PERSON" weightage="20" keywordseo="mallya">Mallya</keyword>, Nirav <keyword id="6354642" type="PERSON" weightage="20" keywordseo="Modi">Modi</keyword>, Mehul Choksi and Lalit Modi still fresh in the memory, India’s lower house of Parliament has finally passed a bill aimed at preventing wilful defaulters and scamsters from getting away scot free. The Fugitive Economic Offenders Bill, which was discussed and approved in the Lok Sabha on July 20th, follows a Presidential ordinance in April which was used by the Enforcement Directorate to initiate asset confiscation proceedings against Vijay Mallya last month. It was meant to be passed in the Budget Session, but since the session proved to be extremely unproductive, the government had no choice to take the ordinance route in the interest of acting quickly. The bill will now move to the upper house of Parliament for approval before becoming an act, replacing the ordinance in the process. Asset seizures and trials The bill is meant to provide more firepower to the government’s clampdown on white collar crime. It allows the government to seize the domestic as well as foreign assets of “economic offenders” who have left the country so their creditors may recover their dues. In order to be designated an “economic offender”, the government needs to file a motion in a special court as it did on July 11th for Nirav Modi and Mehul Choksi. While the bill doesn’t enable the government to bring back criminals to the country, the government assumes that the threat of asset confiscation will convince them to come back and stand trial. In addition to loan defaults and money laundering, the crimes that fall under the purview of the bill include tax evasion and the use of black money. The bill cannot come into effect retroactively, meaning that it will only apply to scams that take place after the date of its enactment. However, the government has already used the ordinance to declare the aforementioned scamsters “economic offenders”. The provisions of the bill indicate that the government is mainly interested in the big fish, the scamsters that make headlines. It only applies to cases where the funds laundered or dues total more than ₹1 billion. This was a source of contention, especially amongst opposition parties, which felt that the ₹1 billion threshold would allow a lot of smaller scams to go unresolved. In response, the interim Finance Minister, Piyush Goyal, that the government would tackle smaller cases after resolving big ones.

India takes its first big step towards avoiding future Nirav Modi, Vijay Mallya-like scams

<ul><li>Total exposure of Indian banks in the alleged fraud is approximately Rs 20,000 crore</li><li><keyword id="6355975" type="COMPANY" weightage="20" keywordseo="axis-bank">Axis Bank</keyword> has an exposure of Rs 20-30 billion, <keyword id="6358005" type="COMPANY" weightage="20" keywordseo="allahabad-bank">Allahabad Bank</keyword> has Rs 40 billion and SBI, Rs 13 billion. </li><li>As a result of the scam, the Reserve Bank of India (RBI) decided to ban LoU-based transactions on March 13.</li></ul> <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> (PNB) has five days to honour its guarantees to the <keyword id="63524" type="CITY" weightage="20" keywordseo="Union-Bank-of-India">Union Bank of India</keyword> to the tune of Rs 10 billion. If it fails to do so, Union Bank, in an unprecedented move, will have no option but to consider PNB a defaulter in its books and may even have to classify the unpaid amount as a non-performing asset (NPA) based on the recommendations of its auditors. Both banks are state-owned and if this default happens, it could shake the foundation of the banking sector leading to both the people and international banking institutions losing faith in the banking system. The only way this can be avoided is if the government or the RBI swoop in and bail PNB out. All this stems from the <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> case which involves fraudulent letters of undertaking (<keyword id="368886" type="PERSON" weightage="20" keywordseo="Lou">LoU</keyword>). And though this matter is being investigated by government agencies, Union Bank contests that there is no fraud in its books. Rajkiran Rai, MD of Union Bank told the <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/pnb-may-become-1st-bank-to-be-labelled-as-defaulter/articleshow/63459075.cms">Economic Times</a>, “For us, it is a genuine claim on PNB backed by documents. It is not a fraud in our books... We will take the auditor’s view. However, we don’t want to list PNB as a defaulter. We are expecting some intervention from either the government or RBI so that there is a resolution by March 31.” LoUs are essentially a tool used between Indian banks as guarantees under which customers of one bank can raise money from the other Indian bank's foreign branch in the form of a short-term credit arrangement, typically 90 days long. In the case of Nirav Modi and Mehul Choksi scam, the total exposure of Indian banks in the alleged fraud is approximately Rs. 20, 000 crore--almost twice the initial estimate. According to <a href="http://www.business-standard.com/article/finance/in-5-days-pnb-may-be-first-bank-to-get-defaulter-tag-due-to-nirav-modi-118032600248_1.html" data-type="tilCustomLink">Business Standard</a>, apart for Union Bank of India, <a class="storyTags" href="http://www.business-standard.com/search?type=news&amp;q=axis+bank" target="_blank">Axis Bank </a>has an exposure of Rs 20-30 billion, <a class="storyTags" href="http://www.business-standard.com/search?type=news&amp;q=allahabad+bank" target="_blank">Allahabad Bank </a>has Rs 40 billion and SBI, Rs 13 billion. As a result of the scam, the Reserve Bank of India (RBI) decided to ban LoU-based transactions on March 13. However, this move has raised concerns with a bunch of bankers. Asked if the RBI decision is an overreach action by the <a href="https://economictimes.indiatimes.com/news/economy/policy/policymakers-need-to-be-careful-sanyal-on-lou-ban/articleshow/63302747.cms">Economic Times</a>, the Finance Ministry's Principal Economic Advisor Sanjeev Sanyal said, "I am not in a position to comment on RBI decision they have just introduced… But, the general point remains that you have to take a nuanced view of these things in particular because you are not dealing with a silo system. You are dealing with an inter-connected ecosystem and if you block off oxygen in one part it rapidly spreads to rest of the system.”

PNB might become first bank to get 'defaulter' tag in 5 days

New Delhi, Feb 27 () Sebi on Thursday slapped a total fine of Rs 5 crore on fugitive Mehul Choksi, Gitanjali Gems and another individual for violating various regulations, including listing norms, in connection with a massive fraud on state-run lender PNB. Choksi, promoter and managing director of Gitanjali Gems, is the maternal uncle of Nirav Modi, who is also facing charges for defrauding state-run Punjab National Bank (PNB) of over Rs 14,000 crore. Both Choksi and Modi fled India after the PNB scam came to light in early 2018. While Choksi is said to be in Antigua, Modi is lodged in a British jail and has challenged India's extradition request. In its order, Sebi said it is imposing a fine totalling Rs 5 crore on Choksi, Gitanjali Gems and Dhanesh Sheth, the executive director of Gitanjali. "... the default is grave and the gravity of this matter cannot be ignored," Sebi said. It quoted a communication from PNB that it had reported to the RBI total fraud of over Rs 11,394 crore in case of unauthorized issuance of LOUs, foreign letters of credit and inland letter of guarantees in the group accounts of Nirav Modi Group and Gitanjali Group and in the account of one Chandri Paper &amp; Allied Products Pvt Ltd. The overall fraud size is said to be even larger at over Rs 14,000 crore. "I am of the considered opinion that the deliberate defiance of the mandatory obligations and hiding the crucial and material information from investors, regulators and stock exchange, as found in this case should be dealt with sternly and the penalty in such cases should serve as effective deterrence," Sebi Adjudicating Officer Santosh Shukla said in a 28-page order. Sebi has penalised the entities for failing to make various requisite disclosures. Gitanjali has not made disclosures regarding withdrawal of credit limits by PNB in view of the alleged fraud by the firm and its subsidiaries, the sudden obligation to repay Rs 1,045.88 crore within 10 days and subsequent developments in the matter. The firm also failed to make disclosures on various litigations and actions by enforcement agencies against it, its managing director and other senior managerial personnel to the stock exchanges and also failed to reply on various clarifications sought by the exchanges till date, Sebi said. In addition, no disclosure was made on resignation of director, company secretary and chief finance officer to the stock exchanges. No disclosures with respect to delay in payment of interest and principal amount for a period of more than three months from the due date and default in payment of interest and principal to LIC on NCDs was made. Sebi noted that LIC has exposure to the firm under secured non-convertible debentures (NCDs) for Rs 125 crore. Gitanjali had issued post-dated cheques which were payable up to July 2019. However, the company stopped making repayments from October 2017. The firm has "prima facie" defaulted on debt obligations to LIC since October 2017, Sebi said. "Noticees actively and deliberately concealed the important information and did not disclose at all by the noticees, to the stock exchanges," it added. Highlighting Choksi's and Sheth's responsibility in making disclosures, Sebi said "instead of fulfilling their responsibilities, based on various media reports, it has been noted that the noticee no. 2 (Choksi) abdicated his responsibilities by leaving the country in the first week of January 2018, days before the alleged fraud came to light. Further, there is no information available with respect to the noticee no. 3 (Sheth)." "In this case, the Noticees have committed repeated and serious defaults by not disclosing subsequent material events / information with regard to material events as found hereinabove. The defaults by the Noticees are blameworthy and serious considering the degree of responsibility bestowed upon them by the statute," Sebi noted. Regarding Choksi and Sheth, Sebi said "the conduct of these directors is apparently mala fide." SRS BJ ABMABM

PNB fraud: Sebi imposes Rs 5-cr fine on Mehul Choksi, others

<ul class="generic-article__summary--ul content--ul"><li class="generic-article__summary--li content--li"><keyword id="176803" type="PERSON" weightage="20" keywordseo="Saffronart">Saffronart</keyword> to help auction assets seized from alleged perpetrators in Punjab National Bank scandal.</li><li class="generic-article__summary--li content--li">The items include artworks, Hermes handbags, a Rolls-Royce and limited-edition watches. </li></ul>The Punjab National Bank scandal is likely to cost India’s second largest state-owned lender about US$2 billion. Sale of assets seized from the alleged perpetrators including diamond designer <keyword id="571991" type="PERSON" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, starting this month, suggests a long road to recovery. Through the Enforcement Directorate, the agency responsible for fighting economic crime in India, the government has engaged Mumbai-based Saffronart to auction a litany of luxury goods to recoup its losses. The list includes prized artworks by Indian and Chinese painters, Hermes’ Birkin and Kelly handbags and a Jaeger-LeCoultre watch in platinum. A <keyword id="925742" type="COMPANY" weightage="20" keywordseo="Rolls-Royce-Ghost">Rolls-Royce Ghost</keyword> and a Porsche Panamera S are also going under the hammer. An on-site live auction is set for February 27 and an online bidding on March 3 and 4, with both events expected to raise US$5.7 million and US$7.1 million, respectively, the auction house estimated in an email to the Post on Wednesday. “These works are of significant interest to strong collectors and connoisseurs of Indian and Chinese art,” said Dinesh Vazirani, CEO and co-founder of Saffronart, which has conducted 250 auctions over its 20-year history. “In terms of interest, the bags and cars have a much wider appeal.” Diamond jewellery designer <keyword id="740578" type="DOMAIN" weightage="20" keywordseo="Nirav">Nirav</keyword> Modi fled India in 2018 after the Punjab National Bank scandal broke out. Photo: Mint via Getty Images Modi fled the country in early 2018, days before the scandal broke out revealing the issuance of letters of understanding for trade that bypassed Punjab National Bank’s internal controls. The Enforcement Directorate has since attached at least US$1 billion worth of assets belonging to Modi and other people charged in the case. Modi is being remanded in the UK’s Wandsworth prison until February 27 as he fights an extradition in a trial that is set to begin in May, according to an Economic Times <a href="https://economictimes.indiatimes.com/news/politics-and-nation/pnb-fraud-case-nirav-modi-to-appear-for-remand-hearing-in-uk/articleshow/73761275.cms" target="_blank" class="link-text">report</a>. on January 30. In another UK courtroom, <keyword id="14678" type="PERSON" weightage="20" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> is appealing against his extradition as India’s government seeks to recover loans tied to the collapse of his <keyword id="6373962" type="COMPANY" weightage="20" keywordseo="kingfisher-airlines">Kingfisher Airlines</keyword>, the Hindustan Times reported on Wednesday.<h4 style="margin-top: 0.714286rem; margin-bottom: 1.42857rem; font-variant: inherit; font-stretch: inherit; font-size: 2rem; line-height: 2.42857rem; font-family: Roboto, sans-serif; vertical-align: baseline; display: inherit;"></h4>The two cases bear some semblance to some of <keyword id="21718" type="LOCATION" weightage="20" keywordseo="Asia">Asia</keyword>’s biggest corporate scandals. Low Taek Jho has been in hiding since the US$4.5 billion scandal involving the looting at a Malaysian state investment fund. Carlos Ghosn fled to Lebanon after being charged for alleged financial misconduct while helming Japanese carmaker Nissan Motor. For India, they are emblematic of the state of its banking industry. Years of poor lending controls, weak recoveries and occasional frauds have saddled the financial system with ever more soured loans. The country’s 42 commercial banks collectively wrote off 2.12 trillion rupees (US$29.7 billion) of bad loans in 2018-19, the <a href="https://www.business-standard.com/article/finance/india-s-banks-wrote-off-rs-2-trillion-worth-of-bad-loans-in-2018-19-119112900099_1.html" target="_blank" class="link-text">Business Standard reported</a> , citing official data released in parliament. That was 42 per cent higher than a year earlier, and equivalent to about one-fifth of their non-performing assets, it said. For Saffronart, its business can do with some stamp of recognition. The government last year engaged the firm to auction a cache of works by Indian and Chinese artists, raising almost US$8 million for the tax recovery department. Saffronart has set the industry standard for the process of valuation for artworks and collectibles, Vazirani said, “based on expertise and data analytics.”

You Searched For "Nirav Modi case" and got 13 results

Here’s how the 13-month chase for Nirav Modi came to an end

Dilsher Dhillon

Interpol issues red notice against Ami Modi, the wife of fugitive Nirav Modi, over $2 billion PNB fraud case

PTI

India has seized over ₹548 million worth of paintings from Nirav Modi’s art collection including prized work by VS Gaitonde

BI India Bureau

India’s corporate fraud investigation agency and the CEOs of state-owned banks can now directly prevent scamsters from leaving the country

Dilsher Dhillon

Sebi imposes Rs 5 cr fine on Mehul Choksi, Gitanjali Gems, another individual

PTI

Nirav Modi Scam: How to game an age-old banking system for $1.6 billion

Prasid Banerjee

Here are the biggest bank frauds that happened in India the previous financial year

Kavita Majumdar

Hyderabad Court stays release of Netflix's Bad Boy Billionaires: India following Ramalinga Raju's objections

IANS

Billionaire fugitive Nirav Modi could be arrested in the UK as soon as this week

Dilsher Dhillon

India takes its first big step towards avoiding future Nirav Modi, Vijay Mallya-like scams

Dilsher Dhillon

PNB might become first bank to get 'defaulter' tag in 5 days

Kavita Majumdar

PNB fraud: Sebi imposes Rs 5-cr fine on Mehul Choksi, others

PTI

Nirav Modi, Punjab National Bank scandal, Rolls-Royce and the rise of a Mumbai auction house

SCMP

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