The diamond merchant neatly executed plans to defraud Punjab National Bank for over Rs 14,000 crore.
NEW DELHI: Around the time breaking headlines were increasing across India’s 350-odd news channels about a diamond merchant and his neatly executed plans to defraud Punjab National Bank of over Rs 14,000 crore, an interesting message came from a senior official to a news channel. It was made as a request: Just call him Nirav and not Modi.
Nirav is now in a London prison, his efforts to strike a mega deal with a top lawyer working out of DLF Chhattarpur in South Delhi has not worked. And the chances are high that his global luxury brand is now reduced to dust. Pavan Lall’s book, Flawed: The Rise & Fall of India’s Diamond Mogul, is the first book (Hachette Publishers) about the man and the works and how he started his career as a music conductor but eventually walked into the solitaire business. Was he a diamond mogul, no he was not because there are still bigger diamond merchants in India dominating the world solitaire bazaar and teaming up with China to offer the West some solid competition. But Nirav—I will also avoid calling him a Modi—had the swag and style, he told the world he was the next Michael Jackson of diamond business. The De Beers men privately called him an upstart and never thought Nirav could offer some big competition. But De Beers handled Nirav well, called him a great player and always observed his work from close.
Nirav, who always wanted to be a musician and a conductor like Zubin Mehta, was forced into the business by Choksi, who was confident Modi would be successful with solitaires. So Modi shifted from Bach and Beethoven and worked on diamonds, calling his brands Love on Body.
His craftsmen strung the stones through an imported metal that never showed. It looked as if diamonds were stuck on the body. But Modi’s glittery showrooms never impressed those in the business, who say his products were grossly overpriced. Senior Enforcement Directorate and the Central Bureau of Investigation officials are wondering whether the diamonds and jewellery seized are actually worth Rs 5,000 crore or just Rs 150 crore.
The diamond business is cyclical and does not revolve around one brand or one name. There are steady players like Rosy Blue, now considered among the biggest in the world and run by the Mehta brothers—Dilip and Russell—and there are other Indian and Chinese brands. The writer understands the crisis triggered by Nirav and Mehul—both are related—and writes very lucidly why and how it caused some solid damage to the Indian diamond dream. Such was the devastating impact of Nirav-Mehul that Commerce Ministry officials would often wonder who to send to global diamond forums to discuss the India growth story. There were times when bureaucrats would simply turn their face away from reporters if asked about Nirav and Mehul.
Lall is on target when he writes: “Together, Nirav Modi and (his uncle) Mehul Choksi may have wanted to create India’s first luxury brand to go international, but the manner in which they executed their business and financed their work has done far more damage to the jewellery industry than can be comprehended.” Lall, who says he often met Nirav, found the diamond merchant a very complex character—all tycoons are complex because that’s the only way they can ride the stairs to heaven—and that Nirav always wanted to be the most definitive diamond merchant.
But being ambitious is not a crime, being a criminal is. The story of fake Letters of Understanding (LoUs) is all history now and the cash is lost, a few PNB managers have been interrogated and arrested. And worse, Nirav is now not talking at all, he is directing everyone in London to his lawyers who are doubly silent because they want their client to be out on bail first.
The country is shocked, rattled. Some are calling it Dancing with Apes—a television commercial of the housing loan division of Punjab National Bank—where partying chimpanzees are warned by a grizzly bear not to blare music after 2100 hours. Many are now wondering why India’s second largest bank didn’t issue a similar warning to Nirav, now standing at the heart of a $1.2 billion fraud.
Nirav is now flatly denying he owes PNB Rs 14,000 plus crore. A belligerent Nirav has—actually—argued in a letter that he owes the bank only around Rs 5,000 crore, and indicated that he and his family members would not return to India. He is not worried about losing his Indian passport. He had acquired a Belgian passport last year. Antwerp, the world’s biggest hub for diamonds where Indian traders now have greater heft than Europeans, is his safest home. Nirav was, however, arrested from his apartment in London following pressures from the Ministry of External Affairs (MEA).
What is extremely interesting is that the scam would not have surfaced if Nirav’s brother, Nishal, had not messed up his interactions with PNB officials. Modi Junior, who was born and brought up in Antwerp and holds a Belgian passport, visited the bank and asked for an LoU. When he was asked for a 100% guarantee for the same, Nishal reportedly told the officer that his family has been taking this letter since the last few years. And then, the officer checked the records and on finding nothing, pressed the alarm bell. A thorough check followed and the fraud was detected.
“He walked the style,” laughed a now retired DRI official. Nirav came in a Rolls Royce and carried bottles of Evian water, sprouts and green tea, even paper napkins. He never favoured litigation and instead, settled his cases under Section 28 (5) of the Customs Act by paying demand, interest and 15% penalty, altogether amounting to Rs 48 crore.
Nirav, who was influential both in India and in the Hoveniersstraat district of sleepy Antwerp, the world’s most famous diamond hub, knows a way to emerge out of the crisis. He and other Indians, for over two decades, have dominated the global diamond trade, turning the pre-dominantly Jewish neighbourhood near Antwerp’s central station into a home for Gujaratis from India.
Nirav’s men, dressed in Versace and Armani suits, haggled with Hasidic Jewish diamond buyers in their trademark long black coats, side curls and skullcaps. He is still considered powerful in Hoveniersstraat. Many remember him and his power lunches—mostly veggies—loved by local Europeans. Thanks to people like Nirav, the growing Indian population has even turned the street’s celebrated kosher restaurants into numerous curry corners—mostly veggies. There is even an iconic Jain temple, to which Nirav donated liberally.
What I find sad is the way Nirav messed up things and landed in prison. I remember how he was once a part of the total Indian takeover of Antwerp. Now, he will have problems walking down the same streets.