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PNB fraud: PMLA court declares Nirav Modi as fugitive economic offender

Nirav is the second businessman after Vijay Mallya to be declared a fugitive economic offender under provisions of the new Fugitive Economic Offenders Act, which came into existence in August last year. Nirav and his uncle Mehul Choksi are the prime accused in PNB fraud case, related to alleged fraudulent issuance of LoU that caused a loss of over $2 bn to the PSB.

, ET Bureau|
Last Updated: Dec 06, 2019, 11.34 AM IST|Original: Dec 05, 2019, 12.18 PM IST
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Mumbai: Nirav Modi declared fugitive economic offender in PNB scam case
Mumbai: Nirav Modi declared fugitive economic offender in PNB scam case
MUMBAI: Finding merit in the Enforcement Directorate (ED) plea that diamantaire Nirav Modi, who is wanted in the Rs13,570 crore-fraud caused to the Punjab National Bank (PNB), left the country to avoid criminal prosecution, a special PMLA court here on Thursday declared him a Fugitive Economic Offender (FEO), thus paving the way for the premier probe agency to confiscate his offshore assets.

He is the second citizen to be declared FEO under the special law. Embattled liquor baron Vijay Mallya was the first Indian national to be declared so earlier this year. “...the FEO Bill was passed in July 2018 with the aim of preventing culprits from evading legal process and fleeing the country. Economic offences not only inflict pecuniary losses on individuals but also affect the economy and have long standing repercussions,” special PMLA judge VC Barde observed while declaring Modi as a FEO.

“As per the allegation made, the accused (Nirav) entered into a conspiracy with other accused and the then deputy general manager (DGM), Gokulnath Shetty, of PNB Brady House branch and committed a fraud to the tune of Rs 280.70 crore in the matter of letter of undertakings (LoUs). It can be gathered that on the date the respondent left the country i.e. January 1, 2018, he was aware of the due date of the payment i.e. January 25, 2018 and left the country in suspicious circumstances,” special PMLA judge Barde said.

“ ...after duly making investigation, where it was found that the fraud by the respondent and the other accused amounted to Rs 6,498.20 crore till 2017 ... The material on record leads to draw inference that the respondent has left the country under the suspicious circumstances in order to dodge the severe consequences of the act,” he added.

Barde observed that fraud-accused Modi never had the intent to return to the country and face the law. “In response to the summons issued by ED, the respondent via email replied that he was out of the country for business purposes and that there were security concerns if he returned to India. The respondent further contended that he could not return as his passport was revoked, upon which ED informed him to approach the Indian embassy for getting temporary travel documents...however, there was no communication from the respondent, thus there is material placed on record by the applicant ED to hold that respondent stayed abroad and refused to return to India to face criminal prosecution, when he had ample time to return before he was arrested in London on March 19, 2019,” Barde further noted.

Reacting to the order, ED counsel Hiten Venegaonkar told ET, “Declaration of Modi as FEO under the special act is the second of its kind after Vijay Mallaya. This declaration will now give powers to the court and ED to confiscate all the properties of Nirav Modi within the country as well as abroad, thus securing the entire proceed of crime. This is beneficial even for the extradition proceedings pending before the UK court and also to recover the losses caused to the Indian economy.”

The extradition trial of Modi is scheduled to take place on May 11-15, 2020. Modi, who is currently lodged in London’s Wandsworth prison, where he will remain in judicial custody pending a full extradition trial.

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