Nirav Modi, the Indian diamond billionaire whose namesake retail chain just opened two stores in the United States, is now being investigated for bank fraud in India, according to numerous press reports.
According to the reports, India’s Central Bureau of Investigation has released a First Information Report (FIR) for criminal conspiracy and cheating against Modi and several family members. The complaint charges that Modi, his brother Nishal, wife Ami, and Mehul Chinubhai Choksi caused Punjab National Bank a loss of 280 crore rupees (approximately $45 million).
A First Information Report is a complaint lodged by a victim to police that sets the justice process in motion.
According to Indian news source Rediff, the complaint came after the bank issued credit based on allegedly fraudulent Letters of Undertaking last month. Bank officials have also been charged with issuing the LOUs without following proper procedures.
“The public servants committed abuse of official position to cause pecuniary advantage to Diamond R US, Solar Exports, Stellar Diamonds,” according to the FIR.
A spokesperson for Firestar International, which owns the Modi retail chain, says that “this matter has no affiliation, legal or otherwise, with Firestar International Limited which is the flagship enterprise of Mr. Nirav Modi.”
Modi himself could not be reached for comment, but a spokesman declined comment to Reuters.
According to its website, Firestar took a majority stake in Sandberg and Sikorski in 2007.
Founded in 2010, Modi’s namesake retail chain has 14 stores throughout the world, including stores in New York City, Las Vegas, and Honolulu. In 2015, Modi told JCK he wanted 100 stores in the United States.
Born to a diamond family, Modi grew up in Antwerp, Belgium, and attended Wharton School of Business at the University of Pennsylvania but eventually dropped out.
(Image courtesy of Nirav Modi)