THE ENFORCEMENT Directorate (ED) has found that fugitive diamond jeweller Nirav Modi diverted about $629 million (Rs 4,299 crore at current rate) of the $1,015.34 million (Rs 6,939.84 crore) outstanding fraudulent Letters of Undertaking (LoU) issued by Punjab National Bank (PNB) to himself, his firms and his relatives, through 15 “dummy companies” based in the UAE and Hong Kong, according to the first prosecution complaint (chargesheet) filed by the agency on Thursday.
According to the ED probe, Modi diverted $265 million (Rs 1,811 cr) to his Group firms, his sister Purvi Modi and her husband Maiank Mehta through nine UAE-based dummy firms — Diagems FZC, Pacific Gems, Unity Trading Company, Tri Color Gems, Universal Fine Jewellery, Himalayan Trader FZE, Hamilton Precious Traders, Unique Diamond and Jewellery FZC, and Vista Jewellery FZC. Both Purvi Modi and Maiank Mehta have been named as accused with Modi in the ED complaint. Mehta is the brother-in-law of diamond trader Russel Mehta of Rosy Blue Group.
The agency, in its 14,000-page complaint, has also said that Modi diverted another $312.81 million (Rs 2,138 crore) of the LoU funds to his various Group companies through six Hong Kong-based firms indirectly controlled by him. These six firms are Auragem Company, Brilliant Diamonds, Eternal Diamond Corporation, Sino Trader, Fancy Creations and Sunshine Gems.
Apart from this, the agency has said that at least Rs 137 crore of the LoU funds were brought back to Nirav Modi’s personal bank accounts in India. Of the $ 265 million (Rs 1,811 cr), the agency has found that about $ 115 million (Rs 786 crore) was diverted to Purvi Modi and Maiank Mehta, another $ 50 million (Rs 341 crore) was given to an offshore firm, Lili Mountain Investment, allegedly controlled by Purvi Modi, $ 65 million (Rs 439 crore) was ploughed into Modi’s flagship firm in India, Firestar International Pvt Ltd, by a couple of offshore firms against share subscription, and another $ 35 million (Rs 239 crore) was diverted to Modi himself.
The ED has said that of the $115 million, $30 million (Rs 205 crore) was given to Maiank Mehta, who later gifted it to his wife in two tranches. The remaining $ 85 million (Rs 581 crore) was allegedly diverted to Dubai-based Fine Classic FZE, controlled by Purvi Modi. This firm later invested the money in Nirav Modi’s Firestar Holdings Ltd in Hong Kong.
According to the ED, the $ 50 million (Rs 341 cr) transferred to Lili Mountain was brought back to Firestar International Pvt Ltd in the form of foreign direct investment (FDI) through a web of offshore firms. The agency has alleged that this money was transferred to Enterprise Emerging Markets Fund, in the British Virgin Islands, which then transferred $ 30 million to Jade Bridge Holdings Ltd, Cyprus and $ 20 million to Forecom Worldwide Investment Ltd, Mauritius in March 2013 and March 2014 respectively. According to the Reserve Bank of India (RBI) data, these two firms subsequently invested the entire money in Firestar International through FDI.
The prosecution complaint filed by the ED in a Mumbai court on Thursday has also named Modi’s father, Deepak Modi, his brothers, Neeshal Modi and Nehal Modi, as accused in the money laundering probe. The agency, sources said, has incriminating evidence against one of the brothers, who allegedly tried to alienate some of the assets of Modi’s firm in Dubai as recently as March this year.
The ED has said that $ 4.97 million (Rs 34 crore) was directly diverted to two of Modi’s firms in the US — Firestar Diamond Inc and A Jaffe Inc, which have both filed for bankruptcy in a US court — and $ 50 million (Rs 341 crore) was given to Deepak Modi. According to the ED complaint, fraudulent LoUs worth $ 3,741.93 million (approximately Rs 24,000 crore) were issued to Modi Group firms between 2011 and 2018. Of this, the total current outstanding fraudulent LoUs is $ 1,015.34 million (Rs 6,939.84 crore).