PNB fraud: DRI sanctions prosecution of Nirav Modi's firms under Customs Act, may face upto 7 years in jail

The DRI on Sunday said that Nirav Modi's firms are fit to be tried under Customs Act in connection with the PNB fraud.

New Delhi: The Directorate of Revenue Intelligence (DRI) on Sunday sanctioned the prosecution of absconding diamond trader Nirav Modi and his three firms in connection with billion dollar Punjab National Bank fraud case.

According to ANI, the decision in this regard was taken as per the guidelines of the Central Board of Excise and Customs (CBEC) on the prosecution of persons in duty evasion cases.

As per the guidelines of Central Board of Excise and Customs, Ministry of Finance, Gov of India on prosecution of persons in duty evasion cases, Directorate of Revenue Intelligence has sanctioned prosecution for #NiravModi and his three firms.

— ANI (@ANI) March 4, 2018

Nirav Modi will be prosecuted for wrong declaration of value and quantity of the imported Cut and Polished Diamonds, Pearls to Customs and diversion of the Duty Exempted goods to the domestic tariff area clandestinely, the report said.

He will also be questioned for the falsification of documentation and submission of the same to Customs.

Furthermore, he will be prosecuted for violation of the rules of "authorised operations" of the special economic zones (SEZ) and causing loss of Customs Duty to the government.

Modi and his three firms Firestar Diamond International, Firestar International Private Limited, and Radhashir Jewellery Company Limited have been found to be fit to be prosecuted under Sections 132, 135(1)(a), 135(1)(b), 135(1)(i) of Customs Act, 1962 and Section 120-B of the Indian Penal Code (IPC), 1860.

#NiravModi & his 3 firms Firestar Diamond International, Firestar International Pvt Limited and Radhashir Jewellery Company Limited have been found to be fit to be prosecuted under Sections 132, 135(1)(a), 135(1)(b), 135(1)(i) of Customs Act, 1962 and Section 120-B of IPC, 1860.

— ANI (@ANI) March 4, 2018

If convicted, the quantum of punishment as per Section 135 (i) (D) of the Customs Act, 1962 for Modi will be up to seven years.

If convicted, the quantum of punishment as per Section 135(i)(D) of the Customs Act, 1962 is upto 7 years imprisonment. Trial is expected to be launched shortly. #NiravModi

— ANI (@ANI) March 4, 2018

The trial in the case is expected to be launched shortly.

A special court in Mumbai had on Saturday issued non-bailable warrants (NBWs) against diamond traders Nirav Modi and Mehul Choksi in the alleged Rs 12,700-crore Punjab National Bank scam.

The court, set up under the Prevention of Money Laundering Act (PMLA), issued the NBWs on applications filed by the Enforcement Directorate (ED), one of the agencies probing the bank fraud cases registered last month.

The court also allowed the ED's application seeking Letters of Rogatory (LR) to seven countries - Malaysia, Armenia, France, China, Japan, Russia and Belgium - in connection with the case.

The ED had earlier issued summonses to Modi and Choksi, both key accused in the scam cases, asking them to appear before the central agency.

However, the two diamond traders, who are said to have left the country before criminal cases were registered, had failed to appear before the ED, prompting the agency to move the PMLA court for issuance of NBWs against them.

On February 27, the ED had moved the court seeking an NBW against Modi.

The agency had told the court that it had issued three summonses to Modi to appear before it.

The agency said it received replies from Nirav Modi for two summonses. 

In response to the second summons, Nirav Modi said he cannot appear before the agency owing to his business commitments.

In reply to the third summons, the businessman raised the issue of his security, the ED counsel said.

"We issued three summonses to Choksi. He neither responded to those summonses nor appeared before the agency," special ED prosecutor Hiten Venegaonkar had told the special court presided over by Judge M S Azmi here on March 1.

The CBI has also arrested Vipul Ambani, president (finance) of Nirav Modi's Firestar Diamond; Kavita Mankikar (executive assistant and authorised signatory of three firms -- Diamond R US, Stellar Diamond, Solar Exports), Arjun Patil (senior executive, Firestar group) and Rajesh Jindal, then head of the Brady House branch of PNB.

Among those arrested in connection with Choksi's firms are Nakshatra group and Gitanjali group CFO Kapil Khandelwal and Gitanjali group manager Niten Shahi.

The PNB detected a 1.77 billion dollar scam in which Modi acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders.

The scam was started in 2011 and was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies. 

(With Agency inputs)