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September 23, 2020

Nirav Modi, accused in PNB case, declared fugitive economic offender

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A special Prevention of Money Laundering Act (PMLA) court on Thursday declared jeweler Nirav Modi as a fugitive economic offender (FEO) under a new act enabling the Enforcement Directorate (ED) to begin confiscating his properties in India, the UK and UAE.

The court will now begin hearing on the list of Modi’s properties both in India and abroad that are to confiscated from December 10.

Nirav Modi, the second person to declared a fugitive under the FEO act after Vijay Mallya. Modi arrested in London in March this year and is presently at the Wandsworth Prison fighting extradition to India. However, on charges of fraud and money laundering in the nearly $2 billion Punjab National Bank (PNB).

The plea seeking to declare Modi as a fugitive was filed in July last year. It was opposed by his lawyer Vijay Agrawal on various grounds but the objections were not considered.

The order comes a day after the special Central Bureau of Investigation (CBI) court issued a proclamation against him asking him to appear before the court within 30 days, starting from December 17.

PMLA declared jeweler Nirav Modi as a fugitive economic offender

The FEO act aimed at deterring economic offenders from evading the law by remaining outside the jurisdiction of Indian courts. The law seeks to expedite the recovery of losses incurred by banks and other entities by confiscating the properties of the offender.

While seeking to declare Modi as a fugitive economic offender, ED had requested the court to issue an order for the confiscation of all properties belonging directly or indirectly to Modi in the country and abroad.

The agency, which investigates financial crimes, had also sought the declaration against Modi’s uncle Mehul Choksi. However, the plea against Choksi still pending as the latter had approached Bombay High Court. Also, to stay the proceedings raising technical defects in ED’s application.

The plea of stay rejected by the high court on Wednesday. However, now the court would begin hearing the ED’s plea to declare Choksi as a fugitive.

ED stated that during the course of the investigation, more than 260 searches conducted across India.  Leading to the seizure of gold, diamond, platinum, silver, precious and semiprecious stones, jewelry and watches. All belonging to Modi and Choksi and companies controlled by them.

ED registered two cases of money laundering against Modi and Choksi

“Bank accounts and shares belonging to Modi and Choksi and companies controlled by them also frozen. Luxury cars and paintings also seized,” said an ED officer.

Moreover, attachment orders of five properties also issued against Modi and Choksi and their companies. The list of the properties submitted to the special PMLA court. However, for the order of confiscation under the Fugitive Economic Offender Ordinance, 2018.

The agency has already filed charge sheets, called the prosecution complaints, against them in ED on May 24 and June 26 last year. Subsequently, the court issued non-bailable warrants against them.

ED had registered two cases of money laundering against Modi and Choksi on the basis of two first information reports (FIR) filed by CBI in January last year.

CBI had alleged that Modi and Choksi allegedly cheated PNB in connivance with certain bank officials. Also, by fraudulently getting Letters of Undertaking (LOUs) issued to their three firms without any collateral. However, without following the prescribed procedure and caused a wrongful loss to the bank.

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