CBI books top diamond merchant in Rs 280 cr cheating case

The Central Bureau of Investigation (CBI) has booked billionaire diamond service provider Nirav Modi, his brother, wife and an enterprise companion for allegedly cheating Punjab National Bank of over Rs 280.70 crore last year, officials said.

The CBI acted on a complaint by the Deputy General Manager of Punjab National Bank, Zonal Office, Mumbai, alleging that Nirav Modi, his brother Nishal Modi, wife Ami Nirav Modi and Mehul Chinubhai -- partners of Diamond R US, Solar Exports, Stellar Diamonds -- committed the offence of cheating the bank and caused a "wrongful loss".

Following the complaint, the CBI registered a FIR under the Indian Penal Code (IPC) sections related to criminal conspiracy, cheating and provisions of the Prevention of Corruption Act against the four.

The FIR revealed that the accused Nirav Modi and his partners requested a loan from the bank on January 16.

The branch officials requested the firms to furnish at least 100 per cent cash margin for issuing lOU for raising buyer's credit.

"These firms contested that they have been availing this facility in the past also but the branch records did not reveal the details of any such facility.

"It also observed that former bank officer Gopal Nath Shetty had fraudulently issued lOUs without following prescribed procedure by obtaining required request applications, documents and approval of the authorities and without making entries in the bank system," the FIR said.

The banks said they fraudulently issued eight lOUs totalling Rs 280.70 crore, for Hong Kong-based Allahabad Bank and Axis Bank.

The CBI carried out raids at 21 places in Mumbai and Surat on February 3 and 4, officials said. 

The CBI also raided the homes of 13 officials and Nirav Modi.