DIAMOND MERCHANT Nirav Modi and his uncle Mehul Choksi may have planned their exit from the country in November itself, after a new team of officials at the Punjab National Bank’s branch at Brady House in Mumbai — where the alleged Rs 11,400 crore fraud originated — expressed concern on issuing Letters of Credit (LC) and Letters of Undertaking (LoU) to firms associated with them, according to sources.
“In November, when there were changes at the Brady House branch of PNB and the new staff members were averse to carrying out fraudulent transactions, the accused planned their exit. Two senior employees, on whose instance the LoUs were issued, left in November itself and are believed to be in Dubai. After (Deputy Manager, PNB, Brady House branch) Gokulnath Shetty’s retirement on January 1, Modi and Choksi, along with their families, fled the country the same week,” said an official linked to the investigation.
Investigators had earlier said that Modi and Choksi left the country a day after Shetty’s retirement. While Modi is reported to have left for the United States with his brother Nishal, a Belgian citizen, on January 1, his wife, Ami, a US citizen, flew out on January 6. Choksi is believed to have left on January 6. “According to records available with us, Modi and his wife travelled to the US,” said the official.
The CBI has also written to at least five banks — Axis Bank, Allahabad Bank, State Bank of India, UCO Bank and Union Bank of India — asking them to share details from their international divisions on buyer’s credit availed by firms which are part of the Modi and Choksi groups. Sources said this has been done to obtain information on buyer’s credit raised through LCs and LoUs by these banks, before the agency launches the formal process of sending Letters Rogatory to foreign countries seeking their assistance in the probe.
“Since these are overseas branches of Indian banks from where buyer’s credit was availed, we have written to their Chief Vigilance Officer or International Divisions seeking details on the Nostro accounts. The information will help us in two ways — in trying to ascertain the exact amount of loss caused to PNB, while the transaction details will help reconstruct the chronology of issuance of unauthorised LCs and LoUs. This has been done before we write to court for issuing LRs to countries like Hong Kong, Belgium, Dubai, Bahrain where these branches are located,” said an official.
Sources said PNB has also informed CBI of an additional potential loss of close to Rs 3,000 crore through issuance of LoUs to companies related to Choksi. “The figure may go up as PNB comes across more and more LoUs and LCs approved by arrested accused Gokulnath Shetty in the last one year as they reach maturity,” said the official.
The CBI suspects that Shetty, who was allegedly involved in issuing LoUs worth Rs 1,000 crore after joining the Brady House branch of PNB in 2010, may have been involved in issuing LoUs worth Rs 5,000 crore or more in the last one year itself. “We suspect that in the last one year itself, Shetty cleared amounts more than five times, as he was nearing retirement,” said the official.
According to the official, while applications for LoUs were reportedly submitted by Modi’s three firms — Diamonds R Us, Solar Exports and Stellar Diamonds — investigators are now probing whether money was routed through a web of shell companies and withdrawn for personal expenses, including purchase of prime properties in Mumbai and Delhi by Modi and Choksi.
While seeking the remand of Vipul Ambani, President (Finance) of Firestar Group of Companies, the CBI had said that the LoU applications filed by some of the group companies were recovered from the Lower Parel office of the Firestar Group. “The funds were routed to Firestar through a web of companies and used by Modi and Choksi for personal gains. They bought many prime properties. Last year’s purchase of the famous music store, Rhythm House in Mumbai, by Modi for Rs 32 crore is one such property,” said the official.
Modi’s lawyer, Vijay Aggarwal, did not respond to text messages.
Meanwhile, sources said Modi and Choksi paid hefty salaries to their senior employees. “While the salaries of two chartered accountants hired by them was Rs 3.5 crore annually, other senior executives also drew salaries much more than the market norm. For instance, arrested accused Kapil Khandelwal’s (CFO, Nakshatra World Ltd) cost to the company (CTC) was Rs 65 lakh. Another former employee who was examined said he left the firm when his salary was increased overnight from Rs 18 lakh to Rs 50 lakh, as he suspected that he would be asked to do something illegal,” said an official.