PNB fraud: Court allows ED to seek details of Nirav Modi’s overseas assets

Mumbai: A special court on Monday approved the Enforcement Directorate’s request to issue a letter rogatory to six countries in the PNB fraud case.

“The LR (letter rogatory) request is for the purpose of identification and seizures of proceeds of crime and collecting documents, which are required in connection with the investigations under PMLA,” said special public prosecutor Hiten Venegaonkar, who appeared on behalf of the investigative agency.

A letter rogatory is a formal request from a court to a foreign court for judicial assistance.

In the application copy, which has been reviewed by Mint, the investigative agency alleged that firms related to Nirav Modi, the man at the centre of the Rs11,400-crore fraud, have siphoned off Rs6,498 crore of banking funds and these were further laundered.

“The accused generated huge proceeds of crime amounting to Rs6,498 crore, which had been siphoned off by them and thereby laundered and amalgamated in mainstream financial system to project it as untainted property,” ED said in its application to the special court, set up under the Prevention of Money Laundering Act.

ED suspects that some parts of the funds could have been laundered and parked in Hong Kong, the US, the UK, the UAE, South Africa and Singapore.

“He (Nirav Modi) spread his business operations in various countries. He had apparently got issued multiple high value Letters of Undertaking (LoUs) in favour of his firms/companies from Punjab National Bank, which resulted in disbursement of funds as per the SWIFT messages sent by PNB,” ED said in the application copy.

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, a worldwide messaging platform for banks.

According to public records with the Registrar of Companies (RoC), Firestar International Ltd has 48 subsidiaries. Four of these units are based out of India and the rest overseas. Meanwhile, CBI issued summons to Nirav Modi and his uncle and Gitanjali Gems owner Mehul Choksi for to appear on Monday, but in an emailed reply they said they cannot appear as their passports have been suspended, said the ED official.

The ministry of external affairs had revoked their passports for four weeks on 16 February.

“If the accused do not honour the summons and the agency believes that they are not cooperating with the probe then the agency can move the PMLA court for a non-bailable warrant,” said an ED official who did not wish to be named. “Even if the passport is suspended they can request the foreign country in which they are currently residing for travel documents,” this person explained.

Separately, Parliament’s public accounts committee (PAC) has called the revenue secretary and top officials of ED, the income tax department and customs to brief the panel on the PNB case, the Press Trust of India reported on Monday, citing an unnamed PAC member. A subcommittee of the PAC wants to question the officials over the fraud and the 80:20 gold import scheme that was announced in 2013 to restrict the imports of the precious yellow metal, which may have helped Modi and Choksi, this person said.livemint