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<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

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>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>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

In February 2018, it came to light that celebrity diamantaire <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> and his uncle <keyword id="2763" type="PERSON" weightage="20" keywordseo="Mehul-Choksi">Mehul Choksi</keyword> had defrauded Punjab National Bank (<keyword id="47268" type="ORGANIZATION" weightage="20" keywordseo="PNB">PNB</keyword>), India’s second-largest state-owned bank, of more than ₹130 billion ($2 billion). 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. In the ensuing months, the country’s top investigative agencies, such as the Central Bureau of Investigation (CBI), filed chargesheets against Modi and Choksi and also accused a number of senior officials at the concerned banks, including the former CEO of PNB, Usha Ananthasubramanian, of being complicit. Concurrently, PNB conducted its own investigation into the matter which concluded recently. The 162-page internal report, which has been reviewed by Reuters, revealed the extent to which the <keyword id="38935" type="PERSON" weightage="20" keywordseo="Fraud">fraud</keyword> touched most of the branch’s operations and found a lot more officials guilty of negligence and/or facilitating the transactions. Here are its main findings:- Over 1,200 credit guarantees were approved Gokulnath Shetty, the deputy general manager of the branch at Brady House, allegedly approved more than 1,200 letters of guarantee over the period in question - 2011 to 2017. He was reportedly supposed to be transferred to another branch but was kept at the branch on the insistence of senior officials. After joining the Brady House branch in 2010 as a foreign exchange officer, Shetty became responsible for authorising transactions over the SWIFT network. However, despite the fact that he was only allowed to approve transactions of ₹2.5 million or less, he did not log the transactions on the bank’s internal systems. This enabled him to authorise larger credit sums without detection. An audit of the bank’s SWIFT system was supposed to take place in 2016 As per instructions from the Reserve Bank of India (RBI), PNB was supposed to undertake a review of its SWIFT financial communication systems in lieu of a possible upgrade. However, the audit did not take place. The bank’s systems were extremely outdated. The bank’s officials had failed to the integrate the bank’s SWIFT platform with its internal software for recording transactions. The fraud involved people at several levels in several branches While it's easy to pin the blame on the people at the helm of PNB, in reality, the fraud was facilitated by people at multiple levels of the bank - senior executives, deputy managers, assistant managers, inspection officers and even clerks. While it may have been orchestrated by a few people, a number of a monitoring and compliance lapses prevented the transactions from being identified sooner. And it extended to other branches as well. For example, the New Delhi office was responsible for the reconciliation and verification of international banking and foreign exchange transactions. Furthermore, a number of discrepancies were flagged in annual inspection reports and memos, but no one acted on them. Even a dubious 50% surge in transactions in the year ended March 2017 did not prompt an investigation. All in all, 54 people were named in the internal report. This likely includes <a href="https://www.businesstoday.in/sectors/banks/pnb-fraud-bank-ceo-sunil-mehta-nirav-modi-suspended-21-officials-internal-probe-underway/story/274664.html">the 21 officers who were suspended</a> in April, pending the conclusion of the inquiry. At the time, PNB’s CEO Sunil Mehta alluded to the possibility that more people would be suspended. The internal report has been handed over to the police and relevant authorities as part of the evidence they’re building in the case against Nirav Modi. It will likely result in a lot more additions to the chargesheet. Meanwhile, Modi is still said to <a href="https://economictimes.indiatimes.com/news/politics-and-nation/nirav-modi-travelled-from-london-to-brussels-on-indian-passport-last-week/articleshow/64629762.cms">be travelling freely</a>. A lot of people will go down as a result of the case, but the big whale still proves elusive for the time being.

Here are the main findings from Punjab National Bank’s internal investigation into the $2 billion Nirav Modi scam

<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>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>The non-executive chairman of <keyword id="45660" type="DOMAIN" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword>, <keyword id="46928" type="PERSON" weightage="20" keywordseo="Ashok-Chawla">Ashok Chawla</keyword>, submitted his resignation on 14 November. </li><li>The move is a significant blow for Yes Bank, which was counting on Chawla to steady the ship ahead of the departure of CEO <keyword id="128581" type="PERSON" weightage="20" keywordseo="Rana-Kapoor">Rana Kapoor</keyword>, whose tenure will not be extended past January 2019 following an order from the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>. </li><li>In July 2018, Chawla, who is a former secretary of the finance ministry, was named in a chargesheet filed by the Central Bureau of Investigation in relation to the Aircel-Maxis case. </li></ul> Yes Bank, one of India’s largest private sector banks, hasn’t had an easy go as of late. Just a few months after the Reserve Bank of India (RBI) refused to extend the tenure of its CEO and founder Rana Kapoor, precipitating <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">a crash in its market value</a>, its non-executive chairman, Ashok Chawla, has resigned. On Wednesday, the bank <a href="https://www.yesbank.in/media/press-releases/yes-bank-announces-resignation-of-chairman-shri-ashok-chawla-from-board-of-directors">confirmed </a>the news of Chawla’s resignation, explaining that it needed a chairman that could devote more attention to the bank as it navigated the management transition period. The move is a significant blow for Yes Bank, which was counting on Chawla to <a href="https://www.livemint.com/Industry/ibwVz9TXbViawOxiyv6nhJ/Yes-Bank-chairman-Ashok-Chawla-looks-to-restore-investor-con.html">steady the ship</a> ahead of Kapoor’s departure. In September, RBI had refused to extend Kapoor’s tenure owing to lapses in governance at Yes Bank which led to under-reporting of non-performing loans under the RBI’s regulatory requirements that mandate all banks recognise and make provisions for bad loans in their balance sheets. Separately, Chawla, who is also the chairman of the National Stock Exchange of India (NSE) and a former joint secretary in the Ministry of Finance, is currently a person of interest in a <keyword id="46183" type="PERSON" weightage="20" keywordseo="Corruption">corruption</keyword> investigation. In July 2018, he was <a href="https://www.livemint.com/Companies/ADf3iTFpj1u3EAKd1pKvFM/Aircel-Maxis-case-Yes-Bank-wants-RBI-to-decide-on-Ashok-Cha.html">named </a>in a chargesheet filed by the Central Bureau of Investigation in relation to the Aircel-Maxis case. That case is centred on the 2006 acquisition of a 74% stake in Indian mobile network operator Aircel, which was owned by C Sivasankaran, by Malaysian telecom firm Maxis, which is owned by T Ananda Krishnan. In 2011, Sivasankaran said he was forced into selling the stake in Aircel by India’s telecom minister, Dayanidhi Maran. It was subsequently found that a firm owned by Maran’s brother received a hefty payment from Maxis for facilitating the deal. Former Union Finance Minister P Chidambaram and his son Karti <a href="https://www.indiatoday.in/india/story/chidambaram-charged-in-aircel-maxis-case-is-accused-no-1-1375213-2018-10-25">have also been charged</a> with money laundering in the case. The RBI has sought to take a sterner approach towards corporate governance in recent times. In October, the CEO of ICICI Bank, Chanda Kochhar, was forced <a href="https://www.businessinsider.in/its-the-end-of-the-road-for-chanda-kochhar/articleshow/66082441.cms">to step down </a>amid a conflict-of-interest scandal. Yes Bank now has to scramble to find a new CEO and chairman. At the end of October, it had shortlisted <a href="https://www.livemint.com/Companies/oglYV7TdL2hm16ukNOsRlI/Yes-Bank-ready-with-first-list-of-names-in-Rana-successor-hu.html">more than 12 candidates</a> to succeed Kapoor, who term as CEO ends on 31 January next year. A final list is expected by the end of November. Meanwhile, owing to Chawla’s alleged involvement in the Aircel-Maxis case, the Securities and Exchange Board of India is reportedly in the process of deciding on whether or not he should continue as <a href="https://www.livemint.com/Companies/7BGhuMZHIvP8oyL4CZWjqI/Aircel-Maxis-case-NSEs-Ashok-Chawla-now-under-Sebi-probe.html">the chairman of the NSE</a>. SEE ALSO: <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">One of India’s largest private banks has lost more than half its market value in 37 days</a> <a href="https://www.businessinsider.in/its-the-end-of-the-road-for-chanda-kochhar/articleshow/66082441.cms">It's the end of the road for Chanda Kochhar</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>

Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe

(Photo source: IANS) <ul><li><keyword id="14678" type="PERSON" weightage="20" keywordseo="Vijay-Mallya">Vijay Mallya</keyword>, an <keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>n liquor tycoon and the former boss of Kingfisher Airlines, will be extradited to India by order of a <keyword id="6354868" type="COUNTRY" weightage="20" keywordseo="UK">UK</keyword> court. </li><li>The allegations leveled against him include fraud, money laundering, and conspiracy. </li><li>He left India in 2016 in the middle of the investigation for the UK, a country where he is also a citizen. </li><li>He now has 14 days to file a appeal against the judgement but Central Bureau of Investigation has stated that they ‘hope to see him soon’. </li></ul>A UK court has approved the extradition of India’s liquor tycoon, Vijay Mallya, to India two years after he left India amid charges of fraud and money laundering. The former boss of the Kingfisher Airlines has 14 days to make an appeal against the judgement. The Central Bureau of Investigation (CBI) has released a statement following the order: “We hope to bring him soon and conclude the case. CBI has its own inherent strengths. We worked hard on this case. We are strong on law and facts and we were confident while pursuing extradition process.” The judgement was passed by the Chief Magistrate, Judge Emma Arbuthnot who stated that prima facie (on first impression) there is a case to be made against Mallya for fraud, conspiracy and money laundering. In recent weeks, Mallya has ‘offered’ to pay back what he owes to Indian banks. The allegations against fraud and money laundering amount to an estimated ₹90 billion. He maintains that these charges against him are ‘politically motivated’ and that he has done nothing wrong. According to the <a href="https://economictimes.indiatimes.com/news/politics-and-nation/mallya-extradition-case-arthur-road-jail-keeps-high-security-cell-ready/articleshow/67023180.cms">Economic Times</a>, there is a ‘high-security’ cell kept ready at the Arthur Road prison for Mallya. The same prison housed the 26/11 Mumbai attack terrorist, Mohammad Ajmal Kasab. See also: <a href="https://www.businessinsider.in/vijay-mallaya-wants-to-pay-back-100-public-money-that-he-embezzled-pleads-for-banks-to-take-it/articleshow/66950116.cms">Vijay Mallya wants to pay back '100% public money' that he embezzled, pleads for banks to take it</a> <a href="https://www.businessinsider.in/indias-corporate-fraud-investigation-agency-and-the-ceos-of-state-owned-banks-can-now-directly-prevent-scamsters-from-leaving-the-country/articleshow/66846397.cms">India’s corporate fraud investigation agency and the CEOs of state-owned banks can now directly prevent scamsters from leaving the country</a> <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>

Indian liquor tycoon Vijay Mallya to be extradited — CBI ‘hopes to see him soon’

Indian start-up companies are looking at 'reverse flipping' - not a cricket terminology - with easy access to capital from private equity and venture capitals, changes in rules regarding round tripping, and the growing maturity of India's capital markets, states the Economic Survey 2022-23. The Survey was tabled in the Parliament on Tuesday. According to the Indian government the above measures have not only slowed down 'Flipping' but companies are also exploring 'Reverse Flipping'. Well, 'Flipping' and 'Reverse Flipping' are not cricket shots. The survey said many Indian companies have been getting headquartered overseas, especially in destinations with favourable legal environments and taxation policies. The technical jargon for this may be identified as 'Flipping', which is the process of transferring the entire ownership of an Indian company to an overseas entity, accompanied by a transfer of all intellectual property rights and all data hitherto owned by the Indian company. "It (flipping) effectively transforms an Indian company into a 100 per cent subsidiary of a foreign entity, with the founders and investors retaining the same ownership via the foreign entity, having swapped all shares," the survey notes. Typically, "Flipping" happens at the early stage of the start-ups, driven by commercial, taxation and personal preferences of founders and investors. Some companies decide to "Flip" because the major market of their product is offshore. Sometimes, investor preferences like access to incubators drive the companies to "Flip" as they insist on a particular domicile. Some companies prefer to domicile in countries where they would like to access Capital Market later for better valuations and ticket size. Better protection and enforcement of IP and tax treatment of Licensing revenue from IP, residential status of Founders, and agile corporate structures have been the reasons for "Flipping" in the past. "Many investors/private equity (PE) funds are based in the US and other places. They also exert pressure on the Indian startup entrepreneurs to move out of India and house their IPRs overseas," an entrepreneur had told IANS preferring anonymity. "Technology companies, primarily B2B, software as a service (SaaS) players and deep tech businesses tend to move out to the US and some towards Singapore. The reason they start in India to begin with is the entrepreneurial talent, active investing ecosystem, solid tech employees and most importantly the ability to develop and run pilots at competitive costs," Sarath <keyword id="293733" type="General" weightage="80" keywordseo="naru" source="Orion">Naru</keyword>, <keyword id="191679" type="General" weightage="80" keywordseo="managing-partner" source="Orion">Managing Partner</keyword>, Ventureast, one of the long standing venture capital firms in India had told IANS. According to Naru, the primary reason for them to move out is to be near their market. "Indian market tends to be small for these businesses and not economically viable to continue to invest in technology and be competitive against global players. The US and Southeast Asia offer large ready markets and it makes most economic and strategic sense to be close to the markets," Naru remarked. "Other than the IPR housing reason, investors like the tax regime in certain countries; lower income tax and capital gains taxes. This also attracts the startups to move and later the founders become Non-Resident Indians (NRI)," Kris Gopalakrishnan, Chairman, <keyword id="2602340" type="General" weightage="80" keywordseo="axilor-ventures" source="Orion">Axilor Ventures</keyword> told IANS. "Some of these governments give specific incentives like rent reimbursements, grants based on local employment etc. Further, the access to capital which does not invest in Indian companies. Finally, <keyword id="88599" type="General" weightage="80" keywordseo="sas" source="Orion">SAS</keyword> companies, especially enterprise SAS, move to the US/UK to be closer to the enterprise customers," Gopalakrishnan added. The Economic Survey said to accelerate 'Reverse Flipping', certain measures like the following are possible: i. Simplifying the process for grant of "Inter-Ministerial Board (IMB) certification" for Start-ups ii. Further simplification of taxation of Employee Stock Options (ESOPs) iii. Simplifying multiple layers of tax and uncertainty due to tax litigation iv. Simplifying procedures for capital flows: Many countries, such as US and Singapore, have easier corporate laws, with lesser restrictions on the inflow and outflow of capital and treatment of Hybrid Securities v. Facilitating improved collaboration and partnerships with established private entities to develop best practices and state-of-the-art start-up mentorship platforms vi. Exploring the incubation and funding landscape for start-ups in emerging fields like social innovation and impact investment. The flipping phenomenon mentioned above reflects start-ups venturing out for short-term gains in the dynamic, uncertain geopolitical world. However, the flip can be reversed with the collective action by the government related regulatory bodies and other stakeholders. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/in-a-major-clean-up-drive-bmc-sacks-55-staffers-for-corruption-suspends-134-for-graft-crimes/articleshow/97491919.cms">In a major clean-up drive, BMC sacks 55 staffers for corruption, suspends 134 for graft, crimes</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/sc-suggest-nirav-modis-bro-in-law-to-give-letter-of-authority-to-cbi-to-access-offshore-bank-accounts/articleshow/97493054.cms">SC suggest Nirav Modi's bro-in-law to give letter of authority to CBI to access offshore bank accounts</a>

Indian start-ups are looking at reverse flipping says Economic Survey

<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>

You Searched For "CBI nirav modi" and got 11 results

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

BI India Bureau

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

Dilsher Dhillon

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

Dilsher Dhillon

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

Dilsher Dhillon

Here are the main findings from Punjab National Bank’s internal investigation into the $2 billion Nirav Modi scam

Dilsher Dhillon

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

Kavita Majumdar

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

Prasid Banerjee

Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe

Dilsher Dhillon

Indian liquor tycoon Vijay Mallya to be extradited — CBI ‘hopes to see him soon’

Prabhjote Gill

Indian start-ups are looking at reverse flipping says Economic Survey

IANS

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

IANS

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