Blaming Punjab National Bank for “destroying” his brand, diamantaire Nirav Modi said the bank has shut the doors on his ability to repay the debt. According to PTI, Modi who is facing multi-pronged investigations, wrote a letter to the bank’s management on February 15/16, blaming the bank for damaging his business and stating that his dues were much less than what the bank claimed.
“In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts,” he said.
On February 14, PNB, the second largest state-run bank, had informed about detecting Rs 11,400 crore fraud at its Brady House branch in Mumbai, and named the firms led by Modi and his uncle Mehul Choksi’s Gitanjali Group, and some other diamond and jewellery merchants as suspects.
Following the complaint by the bank, central government agencies, the CBI and the Enforcement Directorate, registered cases against businessman Nirav Modi, his American wife Ami, and uncle Choksi, besides some others. Modi left the country along with his family in the first week of January, before the alleged scam became public.
In the letter, Modi pegged the money his companies owe to the bank under Rs 5,000 crore. “The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns. This thereby jeopardised our ability to discharge the dues of the group to the banks,” the businessman wrote.
On the over Rs 11,000-crore loss claimed by the PNB in the FIR, Modi said, “As you are aware, this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. Even after your complaint was filed, in good faith I wrote to you saying please sell/allow me to sell Firestar Group, or their valuable assets, and recover the dues not just from Firestar Group, but also from the three firms.”
Valuing his domestic business at around Rs 6,500 crore, he said, “This could have helped reduce/discharge the debt to the banking system,” but added that this is not possible as all his bank accounts have been frozen and assets sealed or seized.
The letter went on to state that PNB had time and again acknowledged that it had extended the buyers credit facility to the three partnership firms for several years, and that there has been no default on the part of any of these firms over this time period. He said that money went through PNB all these years for the repayments of the advances given by the overseas bank branches under the buyers credit.
In the letter, Modi also wrote that PNB has been earning bank charges to the tune of crores of rupees on the buyers credit facility from the three partnership firms and that PNB has extended the money to the firm’s buyers as well from where also it has been receiving full payments, with interest and on time all these years.
“That Firestar International and Firestar Diamond International have never been in default to any bank, and the bankers are fully secured”.
On the valuables that CBI/ED searches yielded Rs 5,649 crore, he said, “These, and other assets of the group and the three firms could have settled all the amounts due to banks. However, now that stage appears to have passed.” He concluded by requesting the bank to “be fair, and support my efforts to make good all the amounts that are found due by my group to all banks.”
As per the PTI report, Modi also stated that his relatives booked in the cases filed by the central agencies had nothing to do with the operations of the firms being scrutinised. He said the bank has wrongly named his brother, who is not at all concerned with the operations of the three firms or other companies. “My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank.”
“Whatever may be the consequences I may face for my actions, the haste was, in my humble submission, unwarranted,” Modi concluded and requested the bank to permit him to pay the salaries to 2,200 employees from the balance lying in the current accounts of his firms.