PNB jeopardised my ability to clear all the dues, says Nirav Modi

Mumbai: In a letter to Punjab National Bank’s management, fugitive jeweller Nirav Modi claimed that PNB's overzealousness has closed all doors on his ability to clear the dues.

It is worth mentioning that Nirav Modi is the alleged mastermind of the largest banking scam in the country’s history, which amounts to Rs 11,000 crore ($1.8 billion).

He further asserted that the bank has claimed false numbers and his relatives booked in various cases by central agencies had nothing to do with the operations of the firms which are being probed.

The letter, wrote on February 15/16 to PNB management, says that the amount of money his companies owe to the bank is under Rs 5,000 crore.

"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 the letter.

"This thereby jeopardised our ability to discharge the dues of the group to the banks," Modi wrote in the letter.

"In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts," he said.

In the letter, Modi has also talked about his and his representatives' extended discussions with the bank officials, apart from the emails sent on February 13 and 15, 2018.

Nirav Modi along with his family left the country in the first week of January, much before the alleged scam surfaced in public.

The second largest state-run bank of the country, PNB, had on February 14 informed the exchanges about detecting a scam as big as $1.77 billion at its Brady House branch in Mumbai. The bank had named firms led by Nirav Modi, his uncle Mehul Choksi's Gitanjali Group and some other diamond and jewellery merchants as suspects in the fraud case.

The central government agencies, Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have registered various cases on the basis of the bank's complaint. A nationwide search has been launched on dozens of offices and residences of the alleged fraudsters.

The bank has mentioned the names of Nirav Modi, his brother, his American wife Ami and uncle Mehul Choksi in the FIR.

Also Read: PNB fraud: Chief Bank Manager Bechu Tiwari, two others arrested

Speaking over the Rs 11k crore loss claimed by PNB in the FIR, Modi said, "As you are aware, this is entirely incorrect and the liability of the Nirav Modi Group is substantially less."

He also claimed that even after the complaint was filed by PNB, he wrote to them in good faith asking them to sell or allow him to sell Firestar Group, or their valuable assets, and recover the dues not just from Firestar Group, but also from the three firms.

Evaluating his domestic business at around Rs 6,500 crore, Nirav Modi said, "This could have helped reduce/discharge the debt to the banking system but this is not possible now as all my bank accounts have been frozen and assets have been either sealed or seized."

He also wrote that PNB had acknowledged many times that the buyers credit facility had been extended by it to the three partnership firms for several years, and asserted that there had been no default on the part of any of these firms over all these years. He said that money went through PNB all these years for the repayments of the advances given by the overseas bank branches under the buyers credit.

"That Firestar International and Firestar Diamond International have never been in default to any bank, and the bankers are fully secured. PNB has over the years been earning bank charges to the tune of crores of rupees on the buyers credit facility extended by PNB to the three partnership firms and that PNB has extended the money to the firm's buyers as well from where also it has been receiving full payments, with interest and on time all these years," he said.

Also Read: Banking scam rocks Chhattisgarh Assembly, 30 Congress MLAs suspended

The valuables that CBI and ED searches have recovered yield Rs 5,649 crore. Speaking over the same, Nirav Modi said, "These, and other assets of the group and the three firms could have settled all the amounts due to banks. Now that stage, however, appears to have passed."

Concluding his letter, he requested PNB to be fair and support his efforts to settle all the dues of his group to all the banks.

Taking the complete responsibility, he said that the bank has wrongly named his brother, who is in no way connected with the operations of the three firms or other companies involved in the alleged fraud.

"My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank."

"Whatever may be the consequences I may face for my actions, the haste was, in my humble submission, unwarranted," Modi concluded and requested the bank to permit him to pay the salaries to 2,200 employees from the balance lying in the current accounts of his firms.