MUMBAI: On a plea of the Enforcement Directorate, a special court here on Thursday declared diamond businessman Nirav Modi, the key accused in the USD 2 billion Punjab National Bank (PNB) fraud case, a fugitive economic offender.
Modi is currently in Wandsworth Prison in London, from where he is fighting extradition on charges related to the money-laundering and fraud case. He was arrested in March this year.
He is the second businessman after liquor tycoon Vijay Mallya to be declared a fugitive economic offender under provisions of the Fugitive Economic Offenders (FEO) Act which came into existence in August last year.
Special PMLA court Judge V C Barde declared Nirav Modi a fugitive economic offender after hearing extensive arguments of lawyers of the diamantaire and the Enforcement Directorate (ED).
Nirav Modi, 48, and his uncle, Mehul Choksi, 60, are the prime accused in a scam involving fake guarantees in the name of a state-run lender to secure overseas loans. Both fled India in January last year before the Central Bureau of Investigations (CBI) began investigations.
Nirav Modi had earlier urged the court here to set aside the ED's plea to declare him an FEO.
Modi and his uncle Mehul Choksi are the main accused in the PNB scam and they both left India before details of the fraud came to light in January 2018. Nirav Modi was arrested in London in March this year and his extradition process is pending.
In July 2018, the central agency filed an application under the newly-promulgated FEO Act to declare him 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 to seek a remedy under the FEO Act.
While both have denied charges, Nirav Modi had earlier urged the court here to set aside the ED’s plea to declare him an FEO.
His lawyer earlier claimed that the ED was relying on evidence and statements recorded under the Prevention of Money Laundering (PMLA) Act to seek a remedy under the FEO Act, but, was not permissible under the FEO Act.
As per the investigating agency, Nirav Modi and his uncle Choksi, in connivance with certain bank officials, allegedly cheated the PNB to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).
These LoUs were allegedly issued in a fraudulent manner by a Mumbai branch of the PNB 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.