Mumbai, India
Oscar nominee Kate Winslet wore a custom-made, smooth black Ralph Lauren robe when she walked the purple carpet in 2016. She was nominated for an Academy Award for her efficiency in “Steve Jobs” – however almost 8,000 miles away in India, commentators weren’t centered on her costume, nor her nomination.
They had been lauding the diamonds cascading from her lobes.
Her delicate earrings had been the gorgeous work of Nirav Modi, an Indian jeweler whose identify had develop into synonymous with uncommon stones and celeb glamour properly past his homeland.
“Kate Winslet sparkled in Indian jewelry designer,” wrote The Occasions of India, as rival newspapers additionally praised the look.
It was the height of Modi’s ascent from obscurity to the wardrobes of the wealthy and well-known. His eponymous model counted celebrities amongst its ambassadors, and his designs appeared on purple carpets from Los Angeles to Cannes. A 3rd-generation diamantaire, Modi projected the picture of a modern-day magnate, and a logo of a rising India.
His empire stretched throughout a number of the world’s most unique retail districts, from Madison Avenue in New York to Bond Road in London and Canton Street in Hong Kong. With roughly a dozen boutiques worldwide and a rising roster of celeb endorsements, Modi appeared to have the world at his toes.
However behind the digicam flashes, a unique story was unfolding, one which hadn’t but appeared in shiny style magazines however was taking form through an online of alleged shadow transactions that ran by means of one in every of India’s largest state-owned banks.
In 2018, Modi was accused by Indian authorities of orchestrating one of many nation’s largest financial institution frauds in trendy historical past.
The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) charged him with defrauding Punjab Nationwide Financial institution of roughly $2 billion. Modi, they claimed, had allegedly been bankrolling his empire on borrowed cash that he had no intention of repaying.
Modi denies the allegations and beforehand stated he owes the financial institution far much less. For almost seven years he has fought makes an attempt to extradite him from London, the place he was arrested in 2019, to face costs together with fraud and cash laundering in India. CNN has contacted his lawyer for remark.
Now, India’s International Ministry says his authorized choices have narrowed to their closing stage.
The struggle, it appears, might quickly be over.
Modi’s story begins within the metropolis of Palanpur, nestled in India’s western Gujarat state and referred to as the ancestral house of the nation’s diamond service provider class. Born in 1971, Modi inherited a multigenerational legacy steeped on this planet of gems.
His grandfather, Keshavlal Modi, started buying and selling tough diamonds within the Nineteen Thirties, navigating the Mumbai-Singapore industrial route and laying the foundations of the household enterprise. However Modi’s childhood was additionally marked by profound tragedy. At simply eight years previous, he witnessed his mom’s suicide, an occasion later cited by his authorized staff throughout a UK extradition attraction, for instance his wrestle with despair.
Modi’s father, Deepak Modi, established his personal diamond enterprise in Antwerp, the place the Palanpuri Jains, adherents of the Jain religion, helped reshape the trade. Their affect remodeled the Belgian metropolis’s commerce from its predominantly Jewish roots right into a thriving Indian powerhouse.
“Dinner desk conversations would typically revolve round diamonds and jewelry,” Modi informed Millionaireasia journal in 2015.
Modi typically spoke about how he wished to develop into an orchestra conductor, however as an alternative he enrolled on the Wharton College on the College of Pennsylvania.
He quickly left his enterprise research behind, returning to India in 1989.
“It was an important excessive for my mother and father after I received in, and let’s say it was not such a excessive after I dropped out,” he stated in a 2016 interview with CNBC.
At 19, Modi started his skilled apprenticeship below his uncle, Mehul Choksi, chairman of the Gitanjali Group, then one of many world’s largest branded jewellery retailers. Headquartered in Mumbai, Gitanjali operated 1000’s of shops throughout India.
In response to creator Pavan Lall, the younger entrepreneur rapidly grew to become Choksi’s “protégé.”
The Gitanjali Group was an enormous in mass market jewellery, retailing gold and diamonds by means of a number of manufacturers. Modi, nevertheless, envisioned one thing much more unique.
He “was pushed to deal with ultra-premium and be like Harry Winston or Bulgari, and focus solely on diamonds,” Lall, who wrote “Flawed: The Rise and Fall of India’s Diamond Mogul Nirav Modi,” informed CNN.
“His rise was in essence pushed by a want to construct India’s first super-luxury diamond jewellery model and have it go worldwide.”
In 1999, he based Firestar Diamond (initially Firestone), supplying main retailers and world markets – and laying the groundwork for world success.
Development of the manufacturers
Antwerp, the place Modi spent a part of his childhood, stands out as the world’s best-known diamond buying and selling middle. But round 150 miles (240 kilometers) north of Mumbai, within the metropolis of Surat, lies one other diamond hub, the place an estimated 90% of the world’s diamonds are reduce and polished.
Town’s manufacturing ecosystem is determined by tough stones sourced from around the globe, processed by tens of 1000’s of employees, and funneled into world markets by means of buying and selling networks centered in Mumbai. The enterprise runs largely on “belief,” in keeping with Anoop Mehta, president of the Bharat Diamond Bourse, which operates one of many world’s largest diamond buying and selling exchanges.
Modi was a product of this ecosystem. Firestar operated a big manufacturing unit inside Surat’s Particular Financial Zone, a duty-free enclave that allowed the corporate to chop, polish and manufacture jewellery for export markets.
Over time, his enterprise expanded internationally. In 2005, Modi acquired the wholesale division of American jewellery firm Frederick Goldman, marking a breakthrough into the US market – a transfer he described as requiring “chutzpah” in an interview with CNBC, since no Indian firm had ever taken over a US agency beforehand within the trade, he stated.
Two years later, he purchased Sandberg & Sikorski, one other key jewellery provider and vendor to the US Armed Forces.
Then, in 2008, a buddy requested Modi to design her a pair of earrings, he stated.
“Once I noticed the enjoyment my creation delivered to her, I made a decision that that is what I needed to do,” he informed Millionaireasia.
And in 2010, he created Nirav Modi.
India is broadly thought of to be the place diamonds had been first found, with the earliest finds relationship again greater than 4,000 years.
For hundreds of years, India’s rulers treasured these valuable stones, adorning their palaces, thrones, and crowns with them, and sporting them in lavish shows of wealth and opulence.
However many of those gems had been in the end taken from India by the British throughout colonization.
When India gained its independence in 1947, it was a deeply poor nation, reeling from a violent partition that killed as much as 2 million individuals. However whilst India opened its doorways to overseas funding within the Nineties, igniting a middle-class increase, the nation carried the stigma of poverty.
For a lot of Indians, Modi’s sudden rise confirmed the world that India too, could make it to the highest. His model shone as a logo of nationwide delight and gentle energy.
A defining second got here in 2010, when luxurious public sale home Christie’s offered one in every of his creations for simply over $3.5 million.
That includes a middle stone of 12.29 carats, surrounded by rows of white and pink diamonds, the Golconda Lotus Necklace made headlines, and was positioned on the quilt of a catalog for the celebrated public sale home – a primary for an Indian model.
“It was essential in demonstrating how an Indian designer might create one thing value hundreds of thousands of {dollars} with the highest quality and most coveted stones on this planet,” stated the creator Lall, who highlighted Modi’s craftsmanship and sourcing of the stones for the piece.
“He truly pored over years and years of Christie’s catalogs to see precisely what labored properly in gross sales and what didn’t. Minimize, colour, readability, design, worth… had been all taken word of earlier than creating for the public sale.”
5 years later, Modi launched his first worldwide retailer on New York’s Madison Avenue. To mark the event, he hosted a grand opening occasion at Rockefeller Middle that attracted a number of high-profile New Yorkers together with Donald Trump Jr. and his then-wife Vanessa Trump. Actresses Naomi Watts and Nimrat Kaur, and supermodel Coco Rocha had been among the many attendees.
“The model is created for a girl who needs to look spectacular day-after-day,” Modi defined in a 2015 interview to mark the shop’s debut. Highlighting his Maharani diamond necklace and earring set, valued at $1.6 million, which was on the market on the boutique, he added: “These diamonds had been what Indian kings and queens wore centuries in the past.”
The next yr, mannequin Rosie Huntington-Whiteley led his Fall/Winter marketing campaign. In 2017, actress Priyanka Chopra was appointed world model ambassador – the identical yr that Forbes estimated his internet value at $1.8 billion.
Further shops opened in main cities together with London, Hong Kong, Beijing, Macau, Las Vegas, Honolulu, Kuala Lumpur, and Singapore.
Lall known as his New York and London boutique openings pivotal moments for Modi – not solely as a result of most companies needed to be round for a number of many years earlier than they might afford these zip codes, “but in addition as a result of he was the one Indian to do it.”
As Modi’s identify appeared on billboards and storefronts throughout the globe, rumors and questions started to flow into contained in the trade, with some asking the place he received the cash.
Modi’s main financial institution for his enterprise operations was Punjab Nationwide Financial institution (PNB), now India’s second-largest public sector financial institution. The alleged rip-off unfolded at its Brady Home department, situated in Mumbai’s arts district – a extremely sought-after space within the metropolis’s prosperous southern area. It was an unassuming location for an alleged multibillion-dollar heist, a small workplace with cramped desks the place workplace employees sat behind glass home windows. It’s now a restaurant, serving natural espresso.
In response to Indian investigators, sure PNB officers issued monetary devices referred to as Letters of Endeavor (LoUs) to corporations managed by Modi, Choksi and their associates. These ensures enabled them to safe credit score strains from overseas banks, which had been then used to buy diamonds and conduct worldwide enterprise.
LoUs had been a trade-finance instrument distinctive to Indian enterprise that served as a financial institution assure for abroad borrowing and had been broadly utilized by importers. They had been discontinued not lengthy after information of the alleged rip-off broke.
Investigators allege the scheme relied on a crucial breakdown in inner controls. PNB officers allegedly issued the LoUs with out acquiring the obligatory money collateral required below banking guidelines and did not report the transactions within the financial institution’s core methods, permitting the liabilities to stay hidden from auditors and senior administration for years.
When, in January 2018, Modi’s associates utilized for brand new letters, a brand new official in cost requested for collateral in money, in the end exposing the alleged rip-off.
A month later, the information broke. However Modi and his household couldn’t be discovered.
Because the scandal dominated primetime tv and splashed throughout entrance pages nationwide, hypothesis over Modi’s whereabouts grew to become a narrative in itself. Rumors swirled that he was hiding in Hong Kong, had resurfaced in New York, or was quietly residing below the radar in London.
An Interpol purple discover was issued for his arrest. At house, Indian authorities moved aggressively, seizing his properties and luxurious belongings, from high-end automobiles to jewellery and artworks.
As investigators from the CBI dug deeper into the case, they arrested two PNB workers for allegedly issuing the fraudulent letters, together with deputy supervisor Gokulnath Shetty and junior clerk Manoj Kharat.
Each males had been arrested in February 2018 and stay on bail awaiting trial. Each deny the fees.
CNN has contacted Shetty’s lawyer for a response.
Kharat informed CNN he was made a “scapegoat” within the case.
He comes from a middle-class household in Karjat, a mountain city about 60 kilometers from Mumbai. Because the eldest son, he stated, he was a supply of delight for his household, who celebrated when he landed what they noticed as a safe and prestigious banking job within the metropolis in 2014.
“Everybody was pleased with me,” Kharat stated. However he insists he was little greater than a cog within the machine when it got here to allegations of multibillion-dollar fraud.
“My work was to solely enter knowledge. That’s it. No energy. No authorization. No authority.”
Years spent out and in of jail, coupled with mounting authorized charges, have taken a heavy toll on his household, he added.
“Financially, I’ve fully collapsed. I’m not doing something now. I’ve no supply of earnings anymore. What am I presupposed to do?”
Modi was arrested in London on the request of Indian authorities in March 2019, greater than a yr after the alleged fraud got here to mild. He has remained in a London jail since then, repeatedly dropping appeals in opposition to his extradition.
Again in India, officers have stated that Modi’s subsequent vacation spot would be the storied Arthur Street Jail – Mumbai’s largest and oldest correctional facility – the place he’ll await trial. This high-security jail is a sprawling complicated that homes 1000’s of detainees, together with infamous gangsters, terrorists and distinguished white-collar offenders.
His uncle and mentor Choksi was arrested final yr in Belgium. He’s additionally combating extradition to India, the place he’s anticipated to be housed in the identical jail as his nephew. Choksi has denied a number of costs together with fraud and cash laundering. CNN has reached out to his legal professionals.
A former worker of Choksi’s, Santosh Srivastava, informed CNN he held considerations concerning the firm’s monetary dealings when he labored as head of the India retail arm of Gitanjali Gems.
He stated he had met Modi a number of occasions at style reveals and firm occasions. Modi was extremely “charismatic” and a “good negotiator,” Srivastava stated, describing him as somebody with the sort of character that might command a complete room.
For the Indian authorities, the scandal was seen by some a political embarrassment, triggering protests by the opposition. Prime Minister Narendra Modi (no relation to Nirav Modi), who rose to energy 4 years earlier on a promise of anti-corruption, confronted intense media and public strain to extradite the fugitive jeweler.
It additionally tainted the diamond trade in India, stated Mehta, the president of Bharat Diamond Bourse. “There have been some tough occasions at the moment because of the banks and the whole lot,” he stated, explaining it grew to become more durable for companies to borrow cash.
“From the monetary aspect, due to the popularity, the market took successful,” he stated. “However issues have moved on.”
For Indian prosecutors, little or no has progressed of their pursuit for Modi, because the fugitive mounts an more and more determined effort to dam his extradition to India.
His legal professionals argue that sending him again might expose him to “torture and ill-treatment” and worsen his fragile psychological well being, making it doable that he might develop into unfit to plead.
The UK Excessive Courtroom dismissed his attraction, concluding that the Indian authorities’s assurances had been adequate to deal with considerations over his jail situations and medical care. Modi could be housed in a particular part of Arthur Street Jail and would have entry to specialist therapy, Indian authorities stated, together with care from a personal physician or psychological well being professional of his alternative.
After hitting a authorized wall within the UK, Modi reportedly took his case to the European Courtroom of Human Rights (ECHR), which granted him anonymity. In July, Indian media reported that it too had been rejected.
The ECHR informed CNN in a written assertion that the courtroom has a “public character save” in circumstances the place an applicant has been granted anonymity or the case file is confidential. “There isn’t a case pending earlier than the Courtroom within the identify of Nirav Modi. This both implies that nothing is pending earlier than the Courtroom regarding Nirav Modi; or that anonymity has been granted,” it stated.
For years, Modi, a balding man of small stature, has held an outsized presence within the creativeness of the Indian public. Although he gave interviews to worldwide media throughout his meteoric rise, he was described as “extraordinarily shy” by the creator Lall.
“For somebody in such a flamboyant enterprise, he was truly very soft-spoken,” Lall stated. “You needed to pressure to listen to what he was saying.”
When and if he lands in India, information channels will be anticipated to supply wall-to-wall protection.
For the Indian authorities, it could mark the long-awaited prosecution of a person whose identify has develop into synonymous with corruption and deceit. For some Indians, it might calm a number of the lingering anger that arose from the notion that the wealthy and well-known might evade accountability.
“If he’s in the end extradited it could possible be a spectacle,” stated Lall.
For Modi, a person who sought to make a global identify for himself within the diamond commerce, it’ll be a homecoming. Simply not the one he’d hoped for.
