PNB Fraud Case: Nirav Modi Declared Fugitive Economic Offender

A special court in Mumbai has declared diamond jeweller Nirav Modi, the key accused in the $2 billion PNB fraud case, a fugitive economic offender on a plea of the Enforcement Directorate.

He is the second businessman after Vijay Mallya to be declared a fugitive economic offender under provisions of The Fugitive Economic Offenders Act, 2018, which came into existence in August last year.

Special PMLA Court Judge VC Barde declared Nirav Modi a fugitive economic offender after hearing extensive arguments of lawyers of the diamantaire and the ED. Nirav Modi had earlier urged the court to set aside the ED's plea to declare him an FEO.

Nirav Modi and his uncle Mehul Choksi are the main accused in the Feburary 2018 PNB scam, which surfaced after they both left India in January 2018.

Nirav Modi was arrested in London in March this year and his extradition process is pending. Mehul Choksi has obtained a citizenship of Antigua, but efforts are on to bring him back as well.

In July 2018, ED filed an application under the newly-promulgated FEO Act to declare Nirav Modi 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, 2010, to seek a remedy under the FEO Act.

This was not permissible under the FEO Act, he said.

According to ED, Nirav Modi and Mehul Choksi, in connivance with bank officials, allegedly cheated Punjab National Bank of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking.

These LoUs were allegedly issued in a fraudulent manner by PNB’s Brady House branch 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.