Nirav Modi

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Nirav Modi
Born (1971-02-27) 27 February 1971 (age 47)[1]
Palanpur, Gujarat, India
Disappeared2018
StatusMost Wanted
ResidenceNew York and New Dehli
NationalityBelgian, Indian
CitizenshipBelgian, Indian
Alma materWharton School of the University of Pennsylvania
OccupationJewellery designer, diamond merchant
Years active1989 - present
OrganizationFirestar Diamond International, Gitanjali Group, A. Jaffe Inc.
Known forDiamond business, bank fraud, wanted by Interpol[2]
Home townMumbai
Net worthLess than $300 million[3]
Height5.6 ft (171 cm)
Weight65 kg (143 lb)
Criminal statusAbsconding
Spouse(s)Ami Modi
Children3
RelativesMehul Choksi (uncle)
Criminal chargeCriminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, corruption, money laundering, fraud, embezzlement and misrepresentation.
Wanted by
Interpol, The Judicial Authoritis of India, Los Angeles Police Department, New York Police Department, Federal Bureau of Investigations, Royal Canadian Mounted Police
Partner(s)
  • Mehul Choksi (uncle)
  • Neeshal Deepak Modi (brother)
  • Parab Subhash Shankhar (manager, close aide)
Wanted sinceAugust 2018
Details
VictimsUnion Bank, PNB Bank, Paul Alfonso
CountryUSA, Hong Kong, Singapore, London, Dubai and India

Nirav Deepak Modi (born 27 February 1971) is an Indian businessman and is wanted by the Interpol for criminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, corruption, money laundering, fraud, embezzlement and breach of contract since August 2018.[4] Modi made international headlines again in early October 2018 when Los Angeles entrepreneur, Paul Alfonso, filed a US$4.2 million lawsuit in Los Angeles against Modi and two of his now defunct companies namely Firestar Diamond Inc. and A. Jaffe Inc. According to court records from the Superior Court of California, Modi fraudulently sold two custom diamond engagement rings to Alfonso that turned out to be lab diamonds. The value of both diamond rings were US$200,000. Modi's younger brother Neeshal Deepak Modi and manager and close aide Parab Subhash Shankhar are also wanted by Interpol since August 2018 in connection with the same crimes as Nirav Modi.[5][6]

Modi is being investigated in a $2 billion fraud case[7][8] of Punjab National Bank (PNB) and is also being sued in the State of California for US$4.2 million for defrauding Los Angeles entrepreneur, Paul Alfonso, over two custom diamond engagement rings that turned out to be lab diamonds.[9][10] In March 2018, Modi applied for bankruptcy protection in Manhattan, New York.[11] In June 2018, Modi was reported to be in the UK and has applied for political asylum in Britain.[12]

Nirav Modi is the founder of "Nirav Modi Global Diamond Jewellery House", established in 2010. He was the first Indian jeweler to have been featured on the covers of Christie’s and Sotheby’s Catalogues. The company has its headquarters in Mumbai, India.

Biography[edit]

Early life[edit]

Nirav Modi was born in Palanpur, Gujarat, and grew up in Antwerp, Belgium. His family has been in the diamond business for several generations.[13][14] When he was 19, he and his father Deepak Modi moved to Mumbai to work in his uncle's business, Mehul Choksi, the head of Gitanjali Group, a retail jewellery company with 4,000 stores in India.[15][16]

Modi attended the Wharton School at the University of Pennsylvania but eventually dropped out.[17][18] While studying, he met his future wife, Ami, the daughter of a diamond businessman.[19]

Career[edit]

After moving to India in 1989, and training in all aspects of the diamond trading business, he founded Firestar in 1999 (Formerly known as Firestone), a diamond sourcing and trading company.[20] Firestar is the exclusive distributor of Rio Tinto’s Argyle pink diamonds in India.[21]

In 2002, his company started manufacturing jewellery on a contract basis. He acquired Frederick Goldman in 2005, and Sandberg & Sikorski and A.Jaffe in 2007 in the USA.[22]

In 2008, a close friend asked Nirav Modi to make a pair of earrings, after which he created the brand.[23][non-primary source needed] In 2010 he launched a diamond store bearing his name in New Delhi's Defence Colony, followed by one in Mumbai's Kala Ghoda. 17 other store openings followed across the world.[24]

He became well known after he designed his "Golconda Lotus Necklace" with an old, 12-carat, pear-shaped diamond as a centerpiece in 2010. The diamond was earlier sold in the 1960s; it was repolished.[25] It featured a lattice of white and pink diamonds. It was included on the cover of Christie’s catalogue in Hong Kong, and was auctioned for US$3.6 million in 2010.[26][27] In 2012, the Riviere of Perfection, featuring 36 flawless white diamonds weighing a total of 88.88 carats, was sold at Sotheby’s Hong Kong auction.[28][29]

In 2014, Nirav Modi opened his first flagship store at Defence Colony, New Delhi, followed by a store at Kala Ghoda, Mumbai in 2015. Nirav Modi launched globally with boutiques in New York City (on Madison Avenue, opened by Donald Trump Jr),[30]) and Hong Kong in 2015, followed by two other boutiques opened in Hong Kong in 2016.,[31] and one in MGM Macau in 2016.[32]

It had been reported that he was planning to sell some of his business to a well-known foreign brand and was also planning to raise funds through an initial public offering (IPO).[33]

It is believed that he was overextended for several years and used new MOUs to pay for the past ones for about seven year. One of his employees has stated that “He wanted to grow his business, and to do in five years what might otherwise have taken 20 years.” he claimed that “If he’d gone public, maybe he could have pledged his equity, raised some money, and finally paid the bank back. Perhaps he would have done that.” [34]

Dealings with Union Bank of India[edit]

The Union Bank of India sued Nirav Modi in a Hong Kong court. Union Bank claimed in a writ filed at the High Court on 26 September 2018 that Nirav Modi guaranteed two loans made to Firestone Trading Private on October 21, 2011 and Firestar Diamond on November 15, 2011. The bank demanded that Nirav Modi pay more than $5.49 million plus interest after both firms allegedly defaulted on repayments.[35]

2018 Investigation and Lawsuits (PNB fraud case) (Paul Alfonso vs. Nirav Modi, Firestone Diamond, Inc. and A. Jaffe, Inc.)[edit]

In February 2018, the Indian government's Central Bureau of Investigation launched an investigation on Modi, acting on a complaint from the Punjab National Bank that alleges Modi and his partners defrauded the bank for ₹280 Crore (approximately USD 40 million) by conspiring with bank officials to fraudulently obtain Letters of Undertaking (LoUs are undertaking provided by one bank to another bank) for making payments to overseas suppliers.[36] While ₹280 Crore is the fraud that has devolved to date, the potential liability of loss to Punjab National Bank goes up to ₹11000 crore. The Enforcement Directorate (ED) is looking into the case of fraud that the CBI has registered against Nirav Modi.[37]

A few of the Nirav Modi's stores remained open with business is as usual around the globe including the one at Marina Bay Sands in Singapore.,[38] however they have gradually all closed.[39] On 7 March 2018, Modi's firm Firestar Diamond Inc. applied for bankruptcy protection at a Manhattan bankruptcy court, in order to protect its assets in the United States and their revolving credit facility with Israel Discount Bank.[40]

Nirav Modi responded to the bank on February 15/16, 2018, stating that “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”.[41] Nirav Modi estimated his domestic business at around Rs 6,500 crore, and said "this could have helped reduce/discharge the debt to the banking system," but claimed that this is now impossible as all his bank accounts have been frozen and assets have been seized.[42] Nirav Modi bought a Rs 900 crore sea-facing property in Mumbai's coveted Samudra Mahal properties with his wife Ami Modi.[43] His properties in India, including jewellery, paintings, and real estate, worth about Rs 523 crore (about $100 million) have been attached by the Enforcement Directorate.

The Enforcement Directorate (ED) attached four wind power plants, owned by Nirav Modi, in Rajasthan with a total capacity of 9.6 megawatt (MW). The plants earn up to Rs 5 crore a year due to share purchase agreement with Rajasthan's state electricity board. These wind power plants have been operational since 2014-15. In March 2018, the ED had attached a 5.24 MW solar power plant spread over 135 acres in Karjat in Ahmednagar district worth Rs 60 crore. In May 2018, the CBI and the ED had registered two FIRs each to probe the case. Both Nirav Modi and Mehul Choksi are said to have left the country before criminal cases were lodged against them. Nirav Modi is absconding and has not joined the ED probe.[44]

With the collapse of his brand, Nirav Modi's fortune has collapsed.[45] Forbes removed him from their annual billionaires list, and on March 9, 2018, estimated his current wealth to be less than $100 million. As a result of the fiasco, the RBI has stopped issuing LoUs and LoCs for imports,[46] resulting in limiting the financial flexibility of importers. His company, A.JAFFE, acquired through his Synergies Corporation, was auctioned in May 2018 and has been purchased by Parag Diamond.[47] All the stores have been since shut down.[48]

In April 2018, it was alleged Nirav Modi had found safe haven in Hong Kong.[49] In June 2018, Nirav Modi was reported to have arrived to the UK where he applied for asylum with Britain’s Home Office stating he was a victim of "political persecution" and denied any wrongdoing.[50][51][52]

On August 31, 2018, Los Angeles entrepreneur, Paul Alfonso, filed a US$4.2 million dollar civil lawsuit (Case No. 30-2018-01016380-CU-BC-CJC) in the Superior Court of California against Nirav Modi, Firestone Diamond, Inc. and A. Jaffe, Inc. for fraud, embezzlement and breach of contract. According to court records, Mr. Alfonso hired Nirav Modi to commission two custom diamond engagement rings worth in excess of US$200,000 that turned out to be fraudulent. Due to the complexity of the case, a case management conference is scheduled for January 11, 2019 at 9am in Department C19 at the Superior Court of California in Orange County. The presiding judge is Honorable Walter Schwarm. Mr. Alfonso also subsequently filed criminal complaints against Nirav Modi in Los Angeles and New York. The District Attorney's office in Los Angeles and New York have not filed criminal charges against Nirav Modi but are expected to do so in the coming weeks.

Achievements and Recognition[edit]

Personal life[edit]

Nirav Modi is married to Ami Modi, they have three children (two daughters and one son).[55][56] They met when both were students at the Wharton School of the University of Pennsylvania, although Modi himself dropped out after a year to return to the diamond business.[56][30]

Ami is a US citizen by birth.[57] In spite of having been a billionaire family, they have attempted to raise children conservatively, and they only use Gujarati in their home.[56] She ran the "Nirav Modi Scholarship for Excellence", which supported 250 students every year. After leaving India, they had been reported to have been living in a JW Marriott Essex House suite in New York City.

References[edit]

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