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Journalism of Courage
At least 16 companies in Hong Kong and the United Arab Emirates (UAE) allegedly connected to fugitive diamond jeweller Nirav Modi have filed for winding up of business in the past three months, according to records seen by The Indian Express. These firms, sources said, were the top buyers and suppliers of Nirav Modi Group of companies and were allegedly controlled by Modi through “dummy directors”.
According to the documents, two such firms in Hong Kong — Auragem Company Ltd and Sino Traders — that filed for winding up on May 25 and July 4, respectively, had received Rs 5,921 crore of the fraudulent letters of undertaking (LoUs) issued by state-owned Punjab National Bank (PNB). Other firms allegedly floated by Nirav Modi in Hong Kong that have filed for winding up in Hong Kong include Brilliant Diamonds Ltd (June 4), Eternal Diamonds Corporation Ltd (June 6), Fancy Creations Company Ltd (May 25) and Sunshine Gems Ltd (June 7). All the firms have been wound up under the “creditors’ voluntary winding up” process initiated by the company directors.
Apart from this at least 10 “dummy” companies in the UAE allegedly formed by Modi to rotate the LoU funds “in the guise of export-import transactions” have also filed for liquidation. Some of these firms such as Unique Diamond and Jewellery FZC, Universal Fine Jewelry FZE, Vista Jewelry FZE, Diagems FZC, Pacific Diamond FZE, Tri color gems FZE and Hamilton precious traders Limited FZCO have received about Rs 7,000 crore through PNB LoUs between 2011 and 2017.
The Indian investigative agencies have alleged that the six Hong Kong-based firms that have filed for liquidation have allegedly diverted at least Rs 840 crore of LoU funds to Modi’s firms Firestar Diamond Inc and A Jaffe Inc in the US and Rs 271 crore to Belgium-based Firestar Diamond BVBA.
Firestar Diamond Inc and A. Jaffe filed for bankruptcy protection in the United States on February 26, while Firestar Diamond BVBA was declared bankrupt by an Antwerp court on March 19.
On August 25, an investigation report submitted by John J Carney, an examiner appointed by a US bankruptcy court hearing the plea of Firestar Diamond and A Jaffe said that the two firms were “directly involved” in transactions related to the alleged Rs 13,500 crore PNB fraud for which Modi has been charged in India.
Modi, who left India in the first week of January, weeks before the banking scam surfaced, is wanted by multiple investigating agencies in the country. In July, the Interpol issued a Red Corner Notice against Modi and earlier this month the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) sent a request for extradition of Modi from the UK.
Both the CBI and ED have filed their chargesheet against Modi and his companies. Modi has been accused of diverting over Rs 4,000 crore of the Rs 6,519 crore outstanding fraudulent LoU issued by PNB to his firms.
