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SBI, Axis among 5 banks under ED scanner for helping Nirav Modi

Five Indian banks are now under the scanner of the Enforcement Directorate for helping Nirav Modi round trip over Rs 6,000 crore of loans extended to his companies by the Punjab National Bank.

Meetu Jain | April 14, 2018 | Updated 09:56 IST
SBI, Axis among 5 banks under ED scanner for helping Nirav Modi

Five Indian banks are now under the scanner of the Enforcement Directorate for helping Nirav Modi round trip over Rs 6,000 crore of loans extended to his companies by the Punjab National Bank. These banks are State Bank of India, Syndicate Bank, Axis Bank, Union Bank of India and Bank of India. In addition, the Enforcement Directorate is also probing 47 companies of Modi that were allegedly involved in round tripping.

Of these entities, 10 are registered in Belgium, 8 in the Netherlands, 3 in the US and 13 in the UAE. India Today has accessed the complete list of entities that are under the scanner. Funds were to be received by these companies by March 4, 2018. Top government sources confirmed to India Today that, "Modi was routing funds leveraged from the PNB Letter of Understanding through these companies.

Some of the money was paid back to PNB directly but most of it was routed through these companies in jurisdictions across the globe. The modus operandi of round tripping, companies involved are being looked at. But the basic reason for round tripping was to ever green the LoUs." The promoters of these companies are also being questioned for their role in round tripping the funds. ED sources say Modi took advantage of tax laws of different jurisdictions to route money.

Sources said, "The reason so many companies were set up in the UAE is that till last year, there was no requirement for paying VAT or for filing returns. Many corporates were taking advantage of this to rotate money. After the 5 per cent tax regime that came into effect last year, this destination has become less attractive but is still an important destination."

These companies include the parent company, Firestar Diamonds, of which Nirav Modi is the promoter and its branches in Antwerp, Amsterdam and Dubai. Many of the entities are established firms especially in Belgium and others appear to be shell companies. Nirav Modi is believed to be staying in Hong Kong with his sister Purvi Mehta, who herself is the promoter of Singapore based Islington private Limited.

 

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