The Enforcement Directorate (ED) has found that absconding diamond jeweller Nirav Modi’s brother Nehal Modi “knowingly and intentionally” assisted him in concealing the alleged laundering of money and “destroying evidence”, while his sister Purvi Modi was an “active participant in the generation of proceeds of crime” and Modi’s father Deepak Modi “assisted the activity of money laundering knowingly”.
Detailing the role of Nehal Modi, the ED, in its complaint to the court, said,”…after the crisis (the Rs 13,500-crore scam at Punjab National Bank), Nehal Modi, brother of Mr Nirav Modi destroyed all the cell phones of all dummy directors in Dubai and Hong Kong and arranged for their tickets to Cairo — a safe haven”.
The Indian Express had earlier reported that Nirav Modi had created over 15 dummy companies overseas to allegedly rotate the funds acquired through letters of undertaking (LoU) from Punjab National Bank (PNB) “in the guise of export-import transactions”.
The ED has now identified at least 17 dummy directors of these companies. All these dummy directors are either employees or ex-employees of Modi’s firms who earned salaries of Rs 8,000 to Rs 30,000 per month for rendering their services.
Relying on statements of two witnesses including a dummy director, the ED said that after the scam broke at PNB, the dummy directors “wished” to return to India but were “persuaded” to stay back, and Nehal Modi “visited Dubai and took lead in the matter and destroyed all the mobiles of dummy company managers/directors”. So far, the ED has been able to record the statements of only four of the 17 dummy directors.
The ED, which has submitted its prosecution complaint against Nirav Modi in court, has alleged that Nehal Modi was “personally overseeing that all the accounts, records were eliminated and was influencing the employees and participated to annihilate the evidences” after Indian agencies began probing the scam.
Apart from this, the agency has also alleged that Nirav Modi’s sister Purvi Modi was a “beneficiary” of the fraudulent LoU funds and also helped Modi in “layering and integration” of the money into “main financial system through acquisition of properties or through investment in financial assets”.
For instance, the ED has found, according to its complaint, that $30 million of the LoU funds was diverted to Maiank Mehta, husband of Purvi Modi. Mehta gifted this money to Purvi, who then used it to open a fixed deposit with Syndicate Bank in Mumbai. She then took a loan from the London branch of Syndicate Bank using the fixed deposit as a security. The proceeds of loan so acquired was then transferred to Ratnakar Bank and were split into four fixed deposits. Subsequently, Radashir Jewellery Pvt Ltd, a company run by Nirav Modi took a loan of Rs 180 crore against these four deposits for two years. In 2015-16, the loan was closed and “the funds were re-remitted to Purvi Modi’s account in Syndicate Bank, London and Barclays Bank, Singapore”.
“She (Purvi Modi) actively participated in the crime of money laundering and layering of the money thus acquired and was also the beneficiary of the proceeds of crime,” the ED complaint said.
The complaint filed by the agency also said that Purvi Modi’s Dubai-based firm, Fine Classic FZE had “purchased diamonds from the dummy Dubai companies of Nirav Modi and had not paid the amount for the purchase”. Fine Classic FZE, according to the ED complaint, had also transferred $65 million to Modi’s Firestar Holdings Ltd, Hong Kong and received preference shares against the investment. Subsequently, the preference shares were transferred to Purvi Modi.
In 2017, Firestar Holdings transferred $ 65 million to Purvi Modi “in guise” of redemption of the said preference shares. “Thus, Purvi Modi indirectly siphoned off the money from Dubai in guise of investment in Firestar Holdings, Hong Kong,” the ED compliant said.
The ED chargesheet has also accused Modi’s father, Deepak Modi, of assisting him in money laundering. The agency said Deepak Modi “is a beneficiary of Link High International and Twin Square companies, in which funds of around $50-55 million were transferred” from the dummy companies of Nirav Modi.
Nirav Modi and his maternal uncle Mehul Choksi, promoter of Gitanjali Group, have come under the scanner of multiple investigating agencies after the the PNB complained against their companies, saying it had been cheated through fraudulent issue of LoUs and Foreign Letters of Credit (FLCs).
Nirav, his wife Ami (a US citizen), brother Neeshal (a Belgian national) and uncle Choksi, promoter of the Gitanjali Group, fled the country in January, weeks before the scam broke. While Nirav Modi is in the UK, Choksi is learnt to be in the US.