Nirav Modi: All you need to know...!!

🔰Nirav Modi: One of top 100 richest person in India. He was ranked 84 on the Forbes Richest List. Forbes magazine described him as the founder of the $2.3 billion (in revenues) of Firestar Diamond. His current net worth is $1.73 billion. He belongs to a family of Diamond merchants. His father name is Deepak Modi, a diamond businessman based in Belgium.

🔰Nirav Modi is school dropout and son of a diamond trader.(School dropouts are not always Pakoda sellers).

🔰Nirav Modi brand is all over the world, including the 2 in US, two in India, two in Hong Kong, Beijing, London, Singapore, Macau.

🔰Priyanka Chopra, who was the brand ambassador of his brand.

🔰Brand: Firestar Diamond and Nirav Modi.

🔰Nirav modi brother Neeshal Modi is husband of Mukesh Ambani’s niece, Isheta Salgaocar’s. (Daughter of Mukesh's sister Dipti).

🔰36 firms linked to Gitanjali Gems are under probe post-PNB scam.

🔰PNB Manager who issued Letter of Undertaking to Nirav Modi, was Gokulnath Shetty(one of 10 officials), retired last year and after his retirement he bought a huge house in Mumbai costing more than 3.5 crore.

🔰Amount involved is more than INR 11500 crore.

🔰Banks involved are PNB, SBI, Axis(for sure is involved in almost all financial irregularities in India, now even abroad), Allahabad Bank, Union Bank, Canara Bank, Bank of Baroda…many more to be reported.

🔰Person Involved: Nirav Modi, Ami Modi(Nirav’s Wife, US citizen), Nishal Modi(Belgian citizen, Isheta’s husband, Mukesh and Anil are father in law of Nishal), Mehul Chinubhai Choksi(MD, Geetanjali Jewely and maternal uncle of Nirav Modi).

🔰US President Trump also attended the opening of Nirav Modi’s New York Store.

🔰Nirav Modi and Ami have 3 children: Rohin, Apasha and Ananya.

🔰Nirav Modi’s foundation involved in Social work in India, supports 250 students every year with scholarships.

What exactly is the issue?

On the advice of the Enforcement Directorate, the Passport issuing authority in the Ministry of External Affairs has suspended validity of passports of #NiravModi & #MehulChoksi with immediate effect for a period of four weeks pic.twitter.com/DwBMxawJ5m

— ANI (@ANI) February 16, 2018

As a followed standard procedure, the LOU(Letter of Undertaking) is a kind of financial instrument granted to parties involved in Import Export business. This is given to build a trust that money will be paid to the exporter by the bank in case the importer fails to do so. With this LOU an entity can perform the financial transactions overseas.

Here LOU was issued by PNB in India. The importer gives this letter to the foreign bank and they allow the “Buyer’s Credit” for the borrower. Once approved, the LOU issuer bank transfer the money to a Nostro Account. This Nostro Account is a foreign currency account of LOU issuer’s bank in the LOU approver’s bank/branch, outside India which is used for cross border transaction, here it was of PNB held in Axis bank overseas. This whole cross border transaction is done via SWIFT messages. In this messaging system, there is no communication except SWIFT message and is one of highly secure financial transaction message available. Once the SWIFT message is sent by issuer bank and confirmed by approver bank, the actual money transfer happens.

Not only the Axis bank(2000 crores), instead, Union Bank(2300 crores), Allahabad Bank(200 crores), SBI(960 crore), Canara Bank, Bank of Baroda also issued the margin to Nirav Modi.

What SWIFT messaging is ?

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. The majority of international interbank messages use the SWIFT network. As of 2015, SWIFT linked more than 11,000 financial institutions in more than 200 countries and territories, who were exchanging an average of over 15 million messages per day. SWIFT transports financial messages in a highly secure way but does not hold accounts for its members and does not perform any form of clearing or settlement. SWIFT does not facilitate funds transfer: rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. Each financial institution, to exchange banking transactions, must have a banking relationship by either being a bank or affiliating itself with one (or more) so as to enjoy those particular business features. SWIFT is a cooperative society under Belgian law owned by its member financial institutions with offices around the world. SWIFT headquarter is in La Hulpe, Belgium, near Brussels.

Points need to be probed:

🔰How come such big institution like PNB didn’t had a system of yearly Audit of records? As per my knowledge the banks in India undergo statutory audit, internal audit, concurrent audit and finally an inspection by RBI.

🔰Why no reconciliation of accounts in PNB happened in these many years?

🔰If we look at the fact that no record was maintained in Bank for this transaction, a simple question comes to my mind is that…is this really a Nirav Modi’s fraud or this was purely a fraud done by Higher Bank officials ? Quite possible that the Bank officials involved, siphoned the money to their foreign counterparts using the Nirav Modi’s LOU and his big brand name… His brand name could have been used to get this margin. This of course the CBI will probe thoroughly.

🔰A known fact is that Nirav Modi already possess huge assets in India, so eloping from India would never have been a good choice for him, considering the current Government strict policies, he would be also aware of the repercussions.

🔰How come all the banks who lost their money in this scam were not being audited since these many years and never had any reconciliation process in place considering the fact the Indian banking system is one of the Robust system around the globe ?

🔰How come all the persons involved left the country just before the scam was reported?

🔰Few media reports suggest that this irregularity was brought to the light last year, how come no probe happened and this never became sensational… was this completely plotted?

Solution:

Make a single power Centre in India, unlike RBI and ministry, the two different power centres. RBI should be brought under Ministry and government should limit itself to core banking sector in India with few of very limited ones.

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Sunil Singh @Sunil_Bharatiya