PNB scam: Mumbai court declares Nirav Modi a fugitive economic offender

Mumbai, Dec 05: A special court in Mumbai on Thursday declared Fugitive diamond merchant Nirav Modi, prime accused in the over $2 billion Punjab National Bank (PNB) scam, and and money laundering case, as a fugitive economic offender by the special Prevention of Money Laundering Act ( PMLA) court. Order on confiscation of his properties will happen later.

Special CBI court judge VC Barde had earlier issued the proclamation order against Modi, his brother Neeshal Modi and a close associate Subhash Parab, directing them to remain present before it by mid-January.

As per the law, once a court issues a proclamation order, the accused needs to remain present before it within the stipulated deadline, failing which it can proceed to declare the accused a proclaimed offender.

Once a person is declared a proclaimed offender, the probe agency can begin confiscation of his properties in India.

Nirav Modi had earlier urged the court here to set aside the ED's plea to declare him an FEO. Modi and his uncle Mehul Choksi are the main accused in the PNB scam and they both left India before details of the fraud came to light in January 2018.

The 48-year-old is currently in Wandsworth Prison in London, from where he is fighting extradition on charges related to a nearly $2 billion Punjab National Bank (PNB) money-laundering and fraud case. He was remanded to extended custody at a hearing on Wednesday and asked to appear via video-link on January 2.

Modi was arrested in London in March this year and his extradition process is pending. In July 2018, the central agency filed an application under the newly-promulgated FEO Act to declare him a fugitive economic offender. His lawyer earlier claimed that the ED was relying on evidence and statements recorded under the Prevention of Money Laundering (PMLA) Act to seek a remedy under the FEO Act. This was not permissible under the FEO Act, he said.

As per the investigating agency, Nirav Modi and his uncle Choksi, in connivance with certain bank officials, allegedly cheated the PNB to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs). These LoUs were allegedly issued in a fraudulent manner by a Mumbai branch of the PNB to the group of companies belonging to Nirav Modi since March 2011, till the case came to light. Under the FEO Act, a person can be declared a fugitive economic offender if a warrant has been issued against him for an offence involving an amount of Rs 100 crore or more and he has left the country and refuses to return.