About 40 per cent of the money lost by banks in alleged frauds perpetrated by fugitive businessmen Nirav Modi, Mehul Choksi and Vijay Mallya has been recovered so far, the Enforcement Directorate (ED) said after the sale of attached shares worth over Rs 5,800 crore on Wednesday.
According to the agency, the latest sale proceeds take the total value of recovery to Rs 9,041.5 crore, or 40 per cent of the over Rs 22,000 crore allegedly defrauded by the trio.
Amid developments in the extradition, amount recoveries, and cases of all three fugitives, News18 provides an recap of the frauds that took place, and how much Mallya, Choksi and Nirav Modi owe the country:
Vijay Mallya: 9,000 Crore
Vijay Mallya, an Indian businessman, is now fighting extradition from the United Kingdom. Mallya is accused of fraud and money laundering in India, where he owes 17 Indian banks an estimated Rs 9,000 crore.
Mallya is also the ex-chairman of United Spirits and a former Rajya Sabha member. He has previously held the positions of chairman of Sanofi India and Bayer CropScience, among others.
Vijay Mallya’s name is most closely associated with the now-defunct Kingfisher Airlines, of all his businesses. The airline company, which he founded in 2005, proved to be his undoing when its business model collapsed in 2008 due to a global recession and skyrocketing fuel prices.
Mallya moved to the United Kingdom in 2016 after facing pressure from lenders following the airline’s demise. Mallya has publicly stated that he has been working to repay his debts since 2016.
Mallya inherited UB Spirits from his father, which is best known for the Kingfisher beer brand, and developed it into India’s largest spirits producer. At the age of 28, he was named chairman of the UB Group.
However, the group’s other businesses were not as successful, with Kingfisher Airlines being the most notable loss.
Kingfisher Airlines, which began operations in 2005, was forced to shut down in 2012 due to a mounting debt burden that made it difficult for the airline to continue operations. The airline is also under investigation for possible money laundering and financial violations.
Mallya departed the country on March 2, 2016, the same day a group of public-sector banks filed a complaint with the Debt Recovery Tribunal. The Fugitive Economic Offenders Act designated him as a fugitive economic offender in January 2019.
Mallya has refuted all claims and has publicly promised to return the lenders the whole principle amount owed.
Mallya published an open letter defending himself just before leaving the country in 2016. “All enquiries conducted have failed to find evidence of misappropriation of funds by Kingfisher Airlines or myself. Despite pledging blue-chip securities and depositing significant amounts in court, a successful disinformation campaign has ensured my becoming the poster boy of all bank NPAs,” he had said in the letter.
Now, Mallya is in the UK and the government of India is trying to extradite him.
Nirav Modi & Mehul Choksi: 14,000 Crore
Nirav Modi and his maternal uncle Mehul Choksi are wanted by Indian authorities in connection with the Punjab National Bank (PNB) scam, in which the duo is is accused of defrauding the bank of over Rs 14,000 crore.
Who are Mehul Choksi and Nirav Modi?
Choksi began his career in the gem and jewellery industry in 1975, and in 1985, he succeeded his father, Chinubhai Choksi, as the CEO of Gitanjali Gems. The firm’s focus at the time was rough and polished diamonds.
Nirav Modi was a high-end diamond jeweller and designer who was placed 57th on Forbes’ 2017 billionaire list. In addition, he is the founder of the Nirav Modi diamond jewellery retail chain.
Modi was the Chairman of Firestar International, the parent company of the Nirav Modi retail chain, which has locations in important global markets. He operated 16 outlets in cities throughout the world, including Delhi, Mumbai, New York, Hong Kong, London, and Macau.
The PNB Case
Choksi and Modi are wanted in India for criminal conspiracy, criminal breach of trust, cheating and dishonesty, including conveyance of property, corruption, and money laundering, according to an arrest warrant.
In March 2018, a special PMLA court issued non-bailable arrest warrants against Choksi and his nephews Nirav and Neeshal Modi. They are accused of conspiring with officials from PNB Bank to cheat the bank of approximately Rs 14,000 crore. The fraud is said to be the largest in the history of Indian banking. Fake Letters of Undertaking were issued by PNB Bank staff at the Brady House branch in Fort, Mumbai. The LoUs were signed in favour of Indian bank branches for the import of pearls for a duration of one year, with the Reserve Bank of India (RBI) allowing a total time period of 90 days from the date of shipping.
The guidelines were disregarded by Indian banks’ overseas offices. They failed to provide any documents or information with PNB that had been made accessible to them by the firms when they availed credit from them.
PNB filed a FIR with the CBI on January 29, 2018, alleging that fake LoUs worth Rs 2.8 billion (Rs 280.7 crore) were originally issued on January 16. PNB had listed three diamond companies in the complaint: Diamonds R Us, Solar Exports, and Stellar Diamonds.
As of May 18, 2018, the scandal had amassed a total value of nearly Rs 14,000 crore.
Nirav Modi’s Extradition and Case
Nirav Modi is the subject of two sets of criminal proceedings, the CBI case relating to the PNB fraud, and the ED case relating to the laundering of the proceeds of that fraud.
He also faces two additional charges of “causing the disappearance of evidence” and intimidating witnesses or criminal intimidation to cause death, which were added to the CBI case.
His extradition to India was ordered in April by UK Home Secretary Priti Patel in the estimated USD 2-billion Punjab National Bank (PNB) scam case. How has now lost the first stage of his extradition appeal in the High Court in London.
The appeal was before a High Court judge for a decision on the papers submitted for the appeal to determine if there are any grounds for an appeal against the Home Secretary’s decision or the Westminster Magistrates Court February ruling in favour of Nirav Modi’s extradition to India to face charges of fraud and money laundering.
A High Court official confirmed that the permission to appeal was “rejected on paper” on Tuesday, which leaves the 50-year-old jeweller with a chance to make his case at a brief oral hearing in the High Court with a renewed leave to appeal application for a judge to determine if it can proceed to a full appeal hearing.
Under the legal guidelines, Nirav Modi as an appellant has five business days to apply for such an oral consideration, giving him time until next week. If a renewal application is made, it will be listed before a High Court judge for a hearing. It is understood that Nirav Modi plans to make such an application.
Choksi’s Extradition and Case
Choksi departed the country to Antigua and Barbuda in January 2018, only days before the PNB scandal was exposed. Mehul Choksi is now Dominica. Choksi disappeared from Antigua and Barbuda towards the end of May 2021. He was apprehended in Dominica while attempting to flee to Cuba on a boat, according to reports.
Several cases have been filed against him. Government officials are attempting to extradite him to India.