Mumbai Acting on the plea of Enforcement Directorate, a special court here on Thursday declared diamantaire Nirav Modi a fugitive economic offender. Nirav is the key accused in the USD 2 billion Punjab National Bank (PNB) fraud case.
He is the second businessman after Vijay Mallya to be declared a fugitive economic offender under provisions of the new Fugitive Economic Offenders Act, which came into existence in August last year.
Nirav had earlier urged the court here to set aside the ED's plea to declare him an FEO. Nirav Modi and his uncle Mehul Choksi are the prime accused in the PNB fraud case, related to alleged fraudulent issuance of Letters of Undertaking that caused a loss of over USD 2 billion to the public sector bank.
In July 2018, the central agency filed an application under the newly-promulgated FEO Act to declare him a fugitive economic offender.
Nirav Modi was earlier arrested in London and his extradition process is pending.
In a setback to Nirav last month, a UK court yet again rejected his bail despite an offer of an "unprecedented bail package", which included 4-million pounds in security as well as house arrest akin to those imposed on terrorist suspects.
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.
This was not permissible under the FEO Act, he said. 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.
Nirav has been behind bars at Wandsworth prison since his arrest on March 19 on an extradition warrant executed by Scotland Yard on charges brought by the Indian government. During subsequent hearings, Westminster Magistrates' Court was told that Nirav was the "principal beneficiary" of the fraudulent issuance of letters of undertaking (LoUs) as part of a conspiracy to defraud PNB and then laundering the proceeds of crime.
(With PTI inputs)
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