He is the jeweller to the rich and famous, who can count over half a dozen of India’s top billionaires amongst his regular clients. His eponymous brand is known for its exclusivity and patented designs, besides precious and rare stones. Today Nirav Modi, the "diamantaire to the stars", is in the news for very different reasons.
Allegations involving an enormous Rs 11,300 crore scam have piled up against him, and the CBI has issued a lookout circular against him and some members of his family, to restrict them from leaving the country. Modi, his wife Ami, brother Nishal and uncle Mehul Choksi, however, left the country in the first week of January.
On Wednesday, the Punjab National Bank disclosed to the stock exchanges that it had detected fraudulent and unauthorised transactions/messages worth $1.77 billion. And the beneficiary was Nirav Modi. Since then the bank has given several details, including that its own officials dishonoured rules and issued illegal guarantee documents to Modi.
“It was found through the SWIFT (Society for Worldwide Interbank Financial Telecommunication) trail that one junior level branch official unauthorizedly and fraudulently issued Letters of Undertaking (LOUs) on behalf of some companies belonging to the Nirav Modi Group viz. Solar Exports, Steller Diamonds and Diamond R Us for availing buyers from overseas branches of Indian banks,” the bank said in a caution notice to other banks on Feb 12.
Modi, his wife, brother and uncle allegedly worked in connivance with a few officials of the bank to illegally attain LOUs, which were cashed out abroad from different Indian banks.
“The companies were maintaining only current accounts with the branch and were not enjoying any fund/non-fund based limits. None of the transactions were routed through the CBS system, thus avoiding early detection of fraudulent activity,” the bank says further in the notice.
All of this is a far cry from a jewellery designer that the world seemed to know. A soft-spoken and very polite Modi, is known to pay personal attention to each of his clients. But quiz him on any of their names and he will just smile at you. A fan of Rolex watches, the only jewellery one can see him wear is a ring that his wife gave him. It’s an 'endless band', a line of diamonds set intricately in an almost invisible gold band. It apparently took Modi and his team nearly two decades to create the band to perfection.
His jewellery collection ranges from Rs 5 lakh to Rs 50 crore. And the 47-year old's financial worth in 2017 was estimated at about $1.73 billion.
Also an avid collector of art, Modi owns several works by M.F. Husain, S.H. Raza, F.N. Souza and Amrita Sher-Gil, some of which dot his Lower Parel lounge in Mumbai. The 28,000 sq ft Nirav Modi lounge is also where many of his super-rich, superstar clients are attended to with utmost discretion. The lounge in fact reflects his personal approach. It is posh - with it’s luxurious drapes, plush sofas and sparkling clean mirrors - but without being overwhelming.
Modi is also father to three, his favourite sport is football, and he likes French author Alexandre Dumas ’ adventure novel - The Count of Monte Cristo. Interestingly, he cannot draw. He communicates his ideas in writing or verbally to his designers, who then create a trial product. A trait that he might share with fashion designer Victoria Beckham, who reportedly uses a team of artists to sketch her designs.
For Modi, diamonds did not happen by chance. His late grandfather Keshavlal Modi ran a business selling rough diamonds and was among the first generation of Indians to settle in Singapore in 1940s. His father Deepak Modi shifted to Belgium in 1960s to expand the business. Modi spent 18 years in Belgium and eventually joined Wharton School of the University of Pennsylvania in the US to major in Japanese and international finance, with a goal to become an investment banker. He left Wharton midway and came to India to join his uncle to learn the ropes of the jewellery business.
Modi, who was often seen in the company of the who’s who of business or the entertainment world, is not a complete stranger to controversy. In 2015, there were rumours that he was on the verge of bankruptcy owing to the recession that had impacted his business and that his lenders were coercing him to restructure the firm.
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Also, there was a probe by the Department of Revenue Intelligence for alleged diversion of duty-free cut and polished gems and diamonds. Several reports at that time suggested that the authorities also suspected the firm of misrepresenting the worth of imported stones and exported jewellery.
In an interview with Fortune India in 2015, Modi dismissed the bankruptcy talk as vicious gossip. “My situation with banks is good. It’s rubbish that there are defaults,” he said during the interview. “There were rumours of defaults and financial problems when I started in 1999, then in 2009, and again in 2011, but there has never been a single one.”
The 2018 allegations, however, are far more serious. There is an enormous amount of public money involved and the Enforcement Directorate is hot on his heels.
Meanwhile, there have been conflicting reports about where Modi is now, with some saying he is in Switzerland and others putting him in New York. He has reportedly offered to pay Rs5,000 crore to banks to settle the dispute.