Fugitive diamond magnate arrested in London, denied bail

Supporters of India's Congress Party staging a protest against billionaire jeweller Nirav Modi in New Delhi last year.
Supporters of India's Congress Party staging a protest against billionaire jeweller Nirav Modi in New Delhi last year.PHOTO: AGENCE FRANCE-PRESSE

LONDON/NEW DELHI • Fugitive billionaire jeweller Nirav Modi, wanted by the Indian authorities over a US$2 billion (S$2.7 billion) loan scam at state-run Punjab National Bank (PNB), has been remanded in custody after appearing before a British court.

India had asked Britain to extradite Modi, whose diamonds have sparkled on famous Hollywood stars, in August last year after he was accused of massive bank fraud. Modi has denied the charges.

The 48-year-old diamond magnate was arrested in the Holborn area of central London on Tuesday. He had gone to a bank to open an account and a staff member contacted the police.

On Wednesday, Modi appeared at London's Westminster Magistrates Court. India has accused him of two charges of conspiracy to commit fraud and conspiracy to conceal criminal property.

"Taking into account the extensive value of the amounts of these allegations ... and the scope in this case... There are substantial grounds to believe that you would fail to surrender before the court if bail were to be granted," Judge Marie Mallon said.

Modi spoke only to confirm his name, age and address, and that he did not agree to being extradited.

His lawyer, Mr George Hepburne Scott, said Modi would deny the charges, which he believes are politically motivated. Mr Hepburne Scott said Modi had arrived in Britain last year before any allegations were made in India, and had lived in the country lawfully and paid taxes.

Despite offering to put up a £500,000 (S$883,888) security, Modi was denied bail. He has been remanded in custody until his next appearance at the same court on March 29.

Modi left India before the country's biggest banking fraud came to light early last year.

 
 
 
 

The third generation of his family to go into the diamond trade, Modi is worth US$1.73 billion, according to Forbes. He once owned 17 jewellery shops around the world, with branches in Asia, the United States and Britain.

PNB, India's second-largest state-run bank, said last year that two jewellery groups headed by Modi and his uncle, Mehul Choksi, had defrauded it by raising credit from other Indian banks with fraudulent guarantees issued by rogue PNB staff. Both men denied wrongdoing.

Prior to Modi's arrest, India's main opposition Congress Party had used the issue to target the ruling Bharatiya Janata Party ahead of India's general election, which begins next month.

Mr Prakash Javadekar, a minister in Prime Minister Narendra Modi's Cabinet, said all fugitives would have to come back and "return the looted money to the nation".

In December last year, a British court ruled that aviation tycoon Vijay Mallya could be extradited home to India to face fraud charges. Mallya is appealing the decision.

Separately, the Enforcement Directorate (ED), India's main financial crime-fighting agency, said a court on Wednesday issued a non-bailable warrant against Nirav Modi's wife, Ami.

The court also allowed the ED to auction 11 of Modi's vehicles - including Rolls-Royce, Porsche, Mercedes and Toyota models - and allowed the income tax authorities to auction 68 paintings he owned.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 22, 2019, with the headline 'Fugitive diamond magnate arrested in London, denied bail'. Print Edition | Subscribe