Indian billionaire jeweller Nirav Modi, one of the prime accused in the country's largest ever bank fraud, denies allegations levelled against him by Punjab National Bank, his lawyer said today.
"There is nothing, there is nothing in it," Vijay Aggarwal, a lawyer representing Modi told Reuters.
He was referring to a police complaint filed by the state-run bank that says companies linked to the jeweller and his relatives received credit worth close to $1.8 billion between 2011 and 2017 using false guarantees supplied by two bank officials.
Aggarwal, speaking by telephone, declined to comment on Modi's whereabouts.
Indian officials are on the lookout for Modi and his family, who police say left India in January prior to the case being filed.
"Everything is documented," Aggarwal said of Modi's dealings with PNB, adding that the bank had regularly levied fees on its dealings with the jeweller's firms.
According to the police complaint, the two officials at a Mumbai branch of PNB fraudulently steered credit to firms linked to Modi and entities tied to jewellery retailer Gitanjali Gems, led by Modi's uncle, Mehul Choksi.
Choksi, who has also left the country, has not commented on the matter. Gitanjali, in a regulatory filing, denied Choksi's involvement in the alleged fraud.
Separately, in a letter to PNB officials, Modi stated that his companies owe the bank under 50 billion rupees ($775.25m), much lower than the amount alleged by the bank.
He also said PNB has jeopardised its chances of recovering the sums owed by going public with its allegations.
"The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns," he wrote in a letter seen by Reuters.
"This thereby jeopardised our ability to discharge the dues of the group to the banks."
Both companies are controlled by Modi. The fraud allegedly involves at least three firms controlled by Modi and others by Choksi.
Five bank officials, including the two at the Mumbai branch, have so far been arrested.
The alleged fraud occurred as one PNB deputy manager, with the assistance of one or more colleagues, issued over 100 fraudulent Letters of Undertaking - essentially guarantees sent to other banks so that they would provide loans to a customer.
After entering the transactions on the SWIFT messaging system, the official, who worked at the same branch from 2010 to 2017 despite normal bank practices of regular rotations - did not record them on PNB's internal system, according to the bank's complaint.
A PNB source said today all its branches have now been asked to reconcile SWIFT messages with entries in their core banking system going back eight or nine years.
The bank has also asked branches to ensure no clerical staff stays in one office for more than five years, and officers no more than three years, the source said.
The fraud case has stunned financial markets and it sent PNB shares tumbling for a fifth trading day in a row.
