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PNB files another CBI complaint against Nirav Modi; fraud balloons to Rs 13,000 crore

The latest allegation against Modi - accused of being the mastermind behind the fraud pegged at Rs 12,686 crore in the first two FIRs - is that his companies had also misused legitimate loans and guarantees.

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PNB files another CBI complaint against Nirav Modi; fraud balloons to Rs 13,000 crore

India's biggest banking fraud is poised to balloon further with the Punjab National Bank (PNB) filing a new complaint against Nirav Modi with the CBI earlier this week. The latest allegation against Modi - accused of being the mastermind behind the fraud pegged at Rs 12,686 crore in the first two FIRs - is that his companies had also misused legitimate loans and guarantees.

According to Reuters, in the complaint filed on March 4, PNB said that it had been cheated of a further $49.4 million (close to Rs 322 crore). The bank now alleges fraudulent transactions between Modi's flagship Firestar group of companies, reportedly including Firestar International Ltd (FIL) and Firestar Diamond International Pvt Ltd (FDIPL), and other entities controlled by him. A report by The Economic Times adds that PNB's internal investigation found circular cases of circular transactions between Solar Exports, Stellar Diamonds and Diamond R US - all companies promoted by Modi in partnership and names in the earlier CBI complaint - and FIL/FDIPL. The fresh complaint further states that the credit sanctioned to Firestar group of companies was not used for the purposes for which it was given.

This is the first time that the Firestar group of companies has been named in a CBI complaint in connection to the still-unravelling PNB scam - three of Modi's other firms were named in the original complaint. To remind you, Firestar Diamond has previously maintained that it isn't linked to the complaints filed by the authorities, and on March 6, it moved the Delhi High Court challenging a money laundering case filed by the Enforcement Directorate (ED). In its plea, FDIPL requested that the Ministry of Finance and the ED provide them a copy of the search warrants after the central agency had raided stores of Nirav Modi brand under Firestar Diamond and seized jewellery and precious stones to recover the defrauded amount.

Advocate Vijay Aggarwal, who is representing Modi in the PNB scam case, dismissed the new complaint as "contrary to law", saying any such allegations should have been part of the initial police case. Legality aside, the fact is that the new disclosure pushes up the cumulative loss borne by India's second-largest public sector lender to over Rs 13,000 crore. And counting.

With agency inputs

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