MEA suspends passports of Nirav Modi and Mehul Choksi

MEA suspends passports of Nirav Modi and Mehul Choksi

The Bank Employees Federation of India-Kerala has alleged that the Rs. 11,400-crore scam at Punjab National Bank is the outcome of the crony capitalism being practised by the ruling establishment in the country. "This Nirav Modi case is a lot of 70 years, particularly because of Congress and to undo it, it requires a focused mind", Swamy asserted. He grew up in Belgium, dropped out of Wharton School at 19 to join the diamond business and his flagship company Firestar Diamond sources and distributes diamonds.

ED has already raided nine properties associated with Nirav Modi, three in Surat, four in Mumbai and two in Delhi. "We have not received any directive from the Reserve Bank of India yet but they are our regulator and we would follow their orders", he added.

Mehta said the fraud remained under investigation, but the bank would take responsibility where it should. Shares of PNB slumped for the third day on Friday. The steep fall has wiped tens of billions of rupees off PNB's market value. At yesterday's close, the bank was valued $4.87 billion.

Apart from SEBI and exchanges, they are being probed by CBI and Enforcement Directorate among other agencies.

The investigators were focusing mainly on the jewellery stores and other businesses controlled by Modi, whose outlets spread from NY to Hong Kong and count Hollywood star Kate Winslet among their clients. His current whereabouts are unknown. When banks issue LoUs for a client (Nirav Modi in this case), they agree to repay the principal and interest on the client's loan unconditionally.

PNB, which has assets of $120 billion, shocked India's financial sector when it disclosed the fraud in a regulatory filing on Wednesday. In a statement, Gitanjali said Choksi "has been falsely implicated in the first place". This is especially so, because while the BJP says that the Congress should answer because it all started in 2011, the Congress says how come the BJP had no inkling of such a huge scam? Indian media carried a group photograph with Prime Minister Narendra Modi in the foreground and Nirav Modi, who is no relation, grinning between rows of Indian business leaders behind him.

Modi (46), who had figured in the Forbes' list of richest Indians, was booked by the CBI for cheating after PNB sent a complaint to it alleging that the jewellery firm owner, his brother, wife and Choksi entered into a criminal conspiracy with the officials of the bank and cheated it, causing a "wrongful loss". The government has revoked the passport of Nirav Modi and a look-out-notice against Modi has been issued, informed by the Law minister Ravi Shankar Prasad told in a press conference on Thursday. PNB is fully committed to its clean banking policy.

The government recently announced a $14bn bailout for state-run banks.

Shares in the bank have fallen by more than 10%.

Indian authorities did not respond to multiple requests for more detail.

The bank said the fraudulent transactions appeared to benefit a handful of customers.

Analysts warned PNB may be left on the hook.

Letter of Undertaking is issued for overseas import payments which involve an issuing bank (Brady House branch of PNB in Mumbai), a receiving bank (Hong Kong branches of Allahabad Bank and Axis Bank), an importer and a beneficiary entity overseas.

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