Billionaire jeweller denies involvement in huge Indian bank fraud-lawyer (updated)

Gitanjali Gems

20/02/2018 06:27

(Adds comments from Nirav Modi's lawyer, changes sourcing on 
letter) 
    By Aditya Kalra and Devidutta Tripathy 
    NEW DELHI/MUMBAI, Feb 20 (Reuters) - Indian billionaire 
jeweller Nirav Modi, one of the prime accused in the country's 
largest ever bank fraud, denies allegations levelled against him 
by Punjab National Bank (PNB)  PNBK.NS , his lawyer said on 
Tuesday. 
    "There is nothing, there is nothing in it," Vijay Aggarwal, 
a lawyer representing Modi, told Reuters, referring to the 
police complaint filed by PNB that alleges that companies linked 
to Modi and one of his relatives received credit worth nearly 
$1.8 billion between 2011 and 2017 using false guarantees 
supplied by two bank officials.  
    Aggarwal, speaking by telephone, declined to comment on 
where Modi was. Indian officials are on the lookout for Modi and 
his family, who police say left India in January prior to the 
case being filed. urn:newsml:reuters.com:*:nL4N1Q60QN  
    "Everything is documented," Aggarwal said of Modi's dealings 
with PNB, adding that the state-owned bank had regularly levied 
fees on its dealings with the jeweller's firms. 
    Asked about his legal strategy, Aggarwal said: "Until there 
is no chargesheet, there is no strategy. When there is a 
chargesheet, there will be a strategy." 
    According to a police complaint by PNB, the two officials at 
a Mumbai branch of the bank steered fraudulent loans to 
companies linked to Modi and entities tied to jewellery retailer 
Gitanjali Gems, which is led by Modi's uncle, Mehul Choksi. 
    "They are covering themselves up," Aggarwal said of the 
complaint. "They want to avoid liability ... that is why they 
are cooking up this story." 
    Choksi, who has also left the country, has not commented. 
Gitanjali, in a stock exchange filing, has denied Choksi's 
involvement in the alleged fraud. 
    Five bank officials, including the two at the Mumbai branch, 
have been arrested. 
    The fraud case has stunned financial markets and it sent PNB 
shares tumbling for a fifth straight trading day on Tuesday.  
    Shares in PNB, which has shed nearly a third of its market 
value since disclosing the fraud, were down 3.5 percent in early 
trading after rating agency Fitch placed the bank on negative 
watch. Later, Moody's also placed the bank's ratings under 
review for a downgrade. 
    Separately, in a letter to PNB officials, Modi stated that 
his companies owe the bank under 50 billion rupees ($775.25 
million), much lower than the amount alleged by the bank. He 
also said PNB has jeopardized its chances of recovering the sums 
owed by going public with its allegations. 
    "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," 
he wrote in a letter seen by Reuters. "This thereby jeopardised 
our ability to discharge the dues of the group to the banks." 
   Both companies are controlled by Modi. The fraud allegedly 
involves at least three firms controlled by Modi and others by 
Choksi.  urn:newsml:reuters.com:*:nL4N1Q45DF 
 
 (Reporting by Krishna V Kurup in Bengaluru; Editing by Euan 
Rocha and Raju Gopalakrishnan) 
 ((Krishna.VKurup@thomsonreuters.com; +91 80 6749 1310; Reuters 
Messaging: Krishna.VKurup.thomsonreuters.com@reuters.net;)) 
 
Keywords: PUNJAB NATL BANK FRAUD/