India’s Biggest Bank Fraud In History Just Got Worse

March 3rd, 2018 by

Despite their own checkered history of misdeeds, big banks tend to take cases of fraud rather seriously. At least they do when their money is involved.

This seems to be the case in what is being billed as the single-biggest instance of bank fraud in India’s history.

Modi (No, Not That Modi) Under Pressure From PNB

The fraud case is focused on one of India’s richest men: jeweler and billionaire Nirav Modi. Most of his businesses center around selling diamonds.

He is being investigated for possibly defrauding the massive Punjab National Bank (PNB), the second-largest state-owned bank in the entire country.

It is worth noting that the jeweler in question is not related to the country’s current prime minister, Narendra Modi.

The story has been reported this week across the international news wires.

Apparently the heat is being turned up on Modi, who has had his passport suspended and a large chunk of his assets frozen. India’s primary financial regulator, the Enforcement Directorate, has seized nearly $900 million worth of Modi’s assets. That amounts to approximately half of his enormous personal fortune.

Raw diamonds from Bunder Mine project (Rio TInto)

Raw diamonds from the Bunder Test Site in Madhya Pradesh, India (Rio Tinto)

At the time the story broke, Modi was actually out of the country on business. This led to some speculation that he was attempting to evade the authorities, but his legal representation has denied this characterization.

Estimated Size of the Fraud Revised Higher

Overall, the size of the alleged scam could be as big as $2 billion.

PNB reportedly found an additional $200 million worth of fraudulent activity that it has added to the original estimate of $1.8 billion.

Few details about the potential case of fraud have been revealed other than the bank characterizing it as a number of “unauthorized transactions” that have been flagged—and Mr. Modi is the suspected culprit.

Some of his companies have been forced to declare bankruptcy while the investigation is ongoing. Investigators have also raided Modi’s properties.

 

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