PNB fraud: Nirav Modi's Firestar Diamond challenges money laundering case in Delhi HC

Nirav Modi-owned Firestar Diamond has moved the Delhi High Court on Tuesday, challenging a money laundering case filed by the Enforcement Directorate (ED) in relation to the Punjab National Bank scam. Nirav Modi is the prime accused in the Rs 12,700 crore PNB fraud case.

In its plea to the Delhi HC, plaintiff Firestar Diamiond International Private Ltd has requested that the Ministry of Finance and the ED provide them a copy of the search warrants. The central agency had raided stores of Nirav Modi brand under Firestar Diamond and seized jewellery and precious stones worth thousands of crores of rupees to recover the defrauded amount.

PNB, in a stock filing last month, had disclosed a scam amounting to Rs 11,400 crore, carried out in connivance with its employees. The Central Bureau of Investigation (CBI) had later filed an FIR on complaint from the private sector bank. Based on this FIR, the ED had lodged a case of money laundering against Nirav Modi and his accomplices for their alleged involvement in the PNB fraud case.

Absconding diamond businessman Nirav Modi and his maternal uncle Mehul Choksi are being probed by several investigative agencies after the PNB scam came to light. Several bank employees involved in the sccam have been nabbed already.

Nirav Modi is accused of availing loans which are estimated to top Rs 12,000 crore via fraudulent Letters of Undertaking (LoU) by PNB's Brady House branch in Mumbai. The loans were acquired from foreign branches of Indian banks against these LoUs, but were not paid back.

Meanwhile, the Serious Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs summoned the ICICI Bank CEO Chanda Kochhar and Axis Bank MD Shikha Sharma on Tuesday in relation to the probe in Mehul Choksi's Gitanjali Gems fraud. BSE has also sought clarification from both Axis Bank and ICICI Bank on their top brass being probed by SFIO.

"They have been summoned for giving the loan facility to Gitanjali Group. Our intention is to get the information from these two banks. We would like to question both of them," the SFIO later said in a statement.

ICICI Bank led the 31-bank consortium that extended credit to the tune of Rs 5280 crore to Mehul Choksi's Gitanjali Group. ICICI Bank alone had given Rs 405 crore loan to Gitanjali Gems. According to media reports, top bank executives are only being questioned for clarifications and are not accused in the loan fraud case.

The CBI had earlier questioned ICICI Bank Executive Director NS Kanan as part of the investigation in India's biggest banking fraud.