Mumbai: The United Kingdom (UK) government’s approval of the extradition of fugitive jeweller Nirav Modi, the key accused in over Rs 12,000 crore Punjab National Bank (PNB) scam, is seen as a shot in the arm for investigation agencies – the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) – in cases filed against him and other accused three years ago.
There were at least five key probe findings submitted to the UK courts via the Crown Prosecution Service which helped India clinch its extradition request for Modi that he had challenged in British courts.
The “crucial evidence” included ED’s detection of Modi’s attempt to acquire citizenship of another country, before the scam came to light in January 2014, to evade law, thereby establishing him as a ‘flight-risk’, sources familiar with the investigations told ThePrint.
Besides, the CBI had submitted “voluminous oral and documentary evidence to substantiate the charges of criminal conspiracy, cheating, criminal breach of trust, criminal misconduct by public servants, destruction of evidence and criminal intimidation of evidence,” said an agency source.
The two agencies have, since January 2018, provided evidence in the form of records, witness testimonies, and mobile-cyber details against Modi, convincing the UK court and authorities that Modi has a case to answer in India on fraud and money laundering charges.
UK’s Home Secretary Priti Patel’s approval for Modi’s extradition Thursday came two months after Westminster Magistrates’ Court ruling. In February, District Judge Sam Goozee said Modi has a case to answer before the Indian courts and that the bars to extradition under the UK law do not apply in his case.
Honorary citizenship of Vanuatu
ED’s probe, which began in February 2018 to look into the money laundering charges, found that Modi had allegedly paid for acquiring the honorary citizenship of Vanuatu in late 2017, but the country’s immigration authorities denied his request after an exercise undertaken by them yielded adverse findings against him.
“The Vanuatu immigration authorities confirmed to ED that Nirav made an attempt to acquire their citizenship. Later, he fled India by air on 1 January 2018, weeks before the scam was detected, and finally went to the UK to hide. The evidence related to Modi’s Vanuatu attempt helped India establish in UK courts that he was a flight-risk,” an agency source said.
ED also submitted evidence to the UK courts hearing Modi’s extradition appeal showing he allegedly held business visa, employment visa, Schengen visa, residential visa of seven countries, including the US, the UK, Hong Kong, the UAE, Singapore and Canada.
ED has said three companies of Modi — Solar Exports, Stellar Diamonds and Diamonds R US — obtained funds worth Rs 6,498 crore, despite their ineligibility, via Letters of Undertaking (LoUs) from PNB’s Mumbai Brady House branch.
Like Modi, his uncle and fugitive jeweller Mehul Choksi, who is an accused in the PNB fraud case, also left India in January 2018. Choksi is accused of defrauding the PNB of Rs 6,097 crore.
The CBI had on January 31, 2018 registered a case against Modi, his firms , their partners, and others, including then officials of PNB, on a complaint from the bank that the accused hatched a criminal conspiracy among themselves to defraud the public sector bank by fraudulent issuance of LoUs.
“The CBI probe showed that a few accused PNB officials, in a conspiracy with the accused firms, had fraudulently issued a large number of LoUs to overseas banks for obtaining buyer’s credit in favour of the accused firms without any sanctioned limit or cash margin and without making entries in system of the bank,” the CBI source said.
Interpol had issued red corner notices against Modi and Choksi on India’s request. CBI and ED have chargesheeted Modi, Choksi, their accused firms and others in the case. India has also sought the extradition of Choksi, who had acquired the citizenship of Caribbean island Antigua and Barbuda before the scam came to light.
‘Attempts to detain dummy directors’
The Enforcement Directorate and CBI had also submitted to UK courts evidence related to Modi’s alleged use of powers of persuasion and forced confinement of a few dummy directors of his overseas shell companies, to dissuade them from returning to India after investigation began in January 2018. The LOU funds drawn illegally from the bank had been diverted to these shell companies.
ED sources said apprehending the dummy directors could disclose secrets about one of the biggest frauds in the Indian banking sector. Modi allegedly tried to convince them that they would be arrested and their assets seized if they returned home. The statements of some of these directors who turned witnesses were recorded by the ED probe.
These dummy directors first assembled in Dubai and then flew to Cairo for temporary confinement against their wishes. The entire cost, including airfare, was allegedly borne by Modi, according to ED sources.
During the period of their forced stay, passports of these dummy directors were allegedly taken away. They were eventually allowed to return only after much cajoling and persuasion—and that too only two at a time and after the alleged signing a few documents, according to ED sources.
ED’s probe also found that the phones of the dummy directors were allegedly destroyed. One of the dummy directors, who turned a witness, claimed that during his stay in Egypt he received threats. He alleged he was told that if didn’t accept Rs 20 lakh and give a false statement to thwart the probe, he would be killed.
‘Bank funds were siphoned off’
ED’s probe also gathered evidence showing that Modi’s accused firms had allegedly siphoned off a substantial part of the funds obtained from the bank via payments to 17 overseas shell entities in Hong Kong, Dubai and the US since 2011 in the guise of dubious export/import, apart from using them to offset earlier LOUs. ED’s probe found that the shell firm’s directors and shareholders were dummy directors and were employees or former employees of Firestar group of companies, who allegedly worked on Modi’s and his trusted officials’ directions.
The statements of various dummy directors and associated persons revealed that they were mechanically transferring the goods and monies as per the directions of Modi without any economic rationale and logic. The ED source said, “ED found the alleged diversion of the proceeds of crime to the extent of $629.21 million has been traced to several group companies, relatives, other dummy companies under their control.”
‘Bank funds used to obtain assets’
The probe also gathered evidence to establish that Modi allegedly utilised proceeds of the funds drawn from the bank to purchase immovable assets abroad. This was done by a maze of transactions to obfuscate the investigation and to cover the tracks of money laundering. However, the probe obtained foreign bank accounts and financial statements of various foreign dummy entities to track such transactions, the sources said.
Sources cited the instance of an immovable property in the US allegedly obtained by Modi in 2017 for $25 million, using bank funds. The property was purchased in the name of a trust, Ithaca Trust, using funds that ED traced which allegedly belonged to a Dubai shell firm — Fine Classic, FZE — controlled by Modi’s relative.
“Fine Classic, FZE had received funds from certain Dubai and Hong Kong – based dummy companies of Nirav Modi that were the recipients of fraudulent LOUs obtained illegally from PNB,” according to one of the ED sources.
‘Attempts to destroy material evidentiary value’
The investigations also chronicled alleged attempts by Modi and his associates to destroy materials of evidentiary value in the case, which in turn strengthened the case against the accused, sources said. “After the case broke out, an associate of Nirav Modi got the secure server located in UAE destroyed. Through that server, the accused and the others used to communicate secretly with their close aides,” the source further said.
“Printouts of some of the incriminating email communications of this secret server were obtained from Dubai. Apart from this, the probe could recover a few bank token devices of the overseas dummy companies through which fraudulent funds were transferred,” the source added.
A team, comprising ED Mumbai’s Joint Director Satyabrata Kumar and a senior CBI officer, went to London nine times to coordinate with the CPS to press for Modi’s extradition.
Modi, 50, who is lodged in Wandsworth Prison in London since 19 March 2019, has 14 days to apply for permission to appeal against the UK home secretary’s order in the High Court in London.