After seizing a total sum of Rs 5,649 crore, investigating agencies may arrest bank officials and employees of the scam-scarred Nirav Modi group business over the next few days, a senior government official told Moneycontrol.
“Raids by enforcement directorate (ED) will continue. One or two people may be arrested over the next few days,” the official, who did not wish to be identified, said.
The ED raids started on Thursday, following a complaint by public sector lender Punjab National Bank (PNB) that foreign exchange credit fraud worth Rs 11,400 crore has allegedly taken place in the bank.
Till now the ED, the agency that tracks overseas money laundering deals, has so far conducted searches at 35 locations across India in Nirav Modi’s showrooms and office spaces and seized diamonds, gold and jewellery worth Rs 5,649 crore till now.
The official said the ED will seize moveable and immoveable assets worth Rs 11,400 crore. However, explaining the procedure for recovery of the alleged fraud, the official said that an immediate recovery won't happen, neither will the banks get the money back.
“The ED’s role is limited to identify the proceeds of the crime and seize assets worth Rs 11,400 crore,” the official explained. Any move on disposal and liquidation of the seized assets would be take through the legal process.
On Wednesday, PNB informed the domestic bourses that it had detected around Rs 11,400 crore worth fraudulent transaction. Prior to this announcement, the bank had already lodged a complaint with the CBI and ED against Nirav Modi and Mehul Choksi for alleged embezzlement of Rs 280.70 crore.
Two PNB officials in its Mumbai branch had allegedly issued fraudulent letters of understanding (LoU) to overseas branches of Axis Bank, State Bank of India, Union Bank of India and Allahabad Bank to raise Rs 11,400 crore to fund the celebrity jeweller’s raw gem import orders.
Modi has 16 jewellery boutiques globally and has renowned a clientele of top Hollywood and Bollywood A-listers. According to reports, Modi is currently in New York.