A 'fancy vivid yellow orange cushion cut' diamond fueled PNB fraud: Report

bloomberg
August 30, 2018

New Delhi, Aug 30: The price of a large yellow diamond alternately shrank and spiked by about a million dollars as it moved across the globe.

The three-carat gem was shipped at least four times between shadowy companies allegedly controlled by fugitive diamantaire Nirav Modi over about five weeks in 2011, according to a report by a US bankruptcy examiner. The practice of round-tripping--trading a good repeatedly to give the appearance of distinct transactions--was central to the multi-crore Punjab National Bank (PNB) scam - the largest bank fraud in Indian history, according to the report filed August 25.

The rapid-fire sales were described as part of a plan in which Modi and associates “fraudulently borrowed approximately $4 billion over a period of years by manufacturing sham transactions purportedly to ‘import’ diamonds and other gems into India using a web of more than 20 secretly controlled shell entities,” wrote John J Carney, the examiner in the bankruptcy case of three US jewelry companies indirectly owned by Modi.

The firms sought protection from creditors in February in New York as the celebrity jeweler’s empire unraveled. Authorities brought criminal charges against against him and alleged accomplices, and Modi became an international fugitive. He’s denied doing anything wrong.

The “fancy vivid yellow orange cushion cut” diamond was first sold by Firestar Diamond Inc., a US company indirectly owned by Modi, and shipped to Fancy Creations Company Ltd., a foreign shell company in Hong Kong also allegedly controlled by Modi, in August 2011, the report says. The price was almost $1.1 million.

The colorful stone was then shipped out two weeks later by Solar Export, a partnership formed by the Nirav Modi family trust, back to Firestar Diamond in the US, for closer to what it was really worth: $183,000, the examiner wrote.

Less than a week later, Firestar, which has offices on Fifth Avenue in New York City, shipped the diamond back to Fancy Creations in Hong Kong, this time for $1.16 million, the report asserts.

And two weeks after that, A Jaffe, the New York City-based diamond company owned by Modi, sold the diamond to World Diamond Distribution, which the report describes as a Modi shell company in the United Arab Emirates, this time for more than $1.2 million.

Long Journey

The practice of round-tripping, which ultimately totaled $213.8 million between 2011 and 2017, the alleged duration of the fraud, generated shipping invoices that were given to the state-owned PNB to obtain short-term loans using letters of undertaking, according to Carney.

The proceeds were then used to fund Modi’s lifestyle and business entities as well as using the funds from new loans to repay the old ones as they came due, the report states, citing a real-estate trust controlled by Modi that paid $25 million in cash for a luxury apartment in the Ritz Carlton on Central Park South in 2017.

Some of the shipments were so large and high-priced “that the packing slips alone should have raised suspicion,” wrote Carney, a former investigator and prosecutor for the US Securities and Exchange Commission and the Department of Justice.

Fedex Gems

In a break with industry practices, the Modi-owned US companies exported diamonds via FedEx instead of with a bonded courier -- including a 17-carat stone sold for $1.7 million and sent from New York City to Hong Kong -- even though FedEx insures packages only up to $150,000, the report states.

“There is no legitimate business reason to ship diamonds worth millions of dollars without obtaining appropriate insurance,” Carney wrote, citing a gem expert retained by the bankruptcy trustee. The report found “substantial evidence” to back up Indian criminal and civil authorities who say Modi’s US companies and senior officials were involved in transactions related to alleged bank fraud and money laundering.

Modi has previously denied wrongdoing, and a lawyer representing him declined to comment Monday on the examiner’s report. The US companies, Firestar Diamond, A. Jaffe and Fantasy Inc., which all operate out of the same New York offices, filed for Chapter 11 bankruptcy in February. (And the three companies still owe Federal Express about $86,000 in unpaid bills, according to a court filing in their bankruptcy case.)

Gem Cutters

Modi, 47, comes from a family of specialist gem cutters, and he has draped his jewels on Hollywood and Bollywood stars, including Kate Winslet, Naomi Watts and Priyanka Chopra. He bought A. Jaffe, an iconic engagement ring company founded in Manhattan in 1892, to add to his collection of brands in 2007 and opened eponymous boutiques in New York City, Macau, Singapore, Beijing and London. Now, he is reportedly in the U.K. and the Indian government has asked authorities there for his extradition.

The charges against Modi have sent shockwaves through Indian banking and politics as well as the international jewelry industry. The alleged crime undermined the prime minister’s anti-graft image and Punjab National Bank posted India’s biggest-ever quarterly bank loss this year after it took a $2 billion hit.

Punjab National Bank

The US examiner’s report “strengthens PNB’s position as a victim of a complex, multi-year fraud,” and the lender is expected to argue for a share of the sale proceeds once Firestar’s assets are sold and secured creditors are satisfied, said Seth R. Freeman, San Francisco-based senior managing director at financial services advisory firm GlassRatner.

A representative for Macy’s, which had previously bought jewelry from Firestar Diamond Inc., said in an email Monday, “We canceled all purchase activity with the company as soon as we became aware of the situation earlier this year.” Costco Wholesale Corp. and Zale Corp. declined to comment and J.C. Penney’s didn’t answer a message.

Other Modi associates were involved, according to Carney’s report, including Mihir Bhansali, chief executive at two of the Modi-owned US companies. Bhansali went to the office of Firestar Diamond in Dubai shortly after those companies filed for bankruptcy in February, according to an account given by the general manager of the Dubai office to Indian authorities and described in Carney’s report.

Speaking before employees in Dubai, Bhansali folded his hands and bowed, then asked them not to return to India or mention his name to any government authorities, according to the report. Bhansali then took hundreds of thousands of dollars in cash and 50 kilograms of gold and left town, the report asserts.

Bhansali’s lawyer, Thomas McCormack, declined to comment, but said in a letter to the examiner that his client denied any wrongdoing.

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News Network
June 3,2020

Mumbai, Jun 3: With an expected increase in wind conditions up to 120 kilometres, cyclone Nisarga is likely to make landfall on the north coast of Maharashtra later today, as per the Indian Meteorological Department (IMD) on Wednesday.

"Wind conditions will further increase up to 100-110 gusting to 120 kmph as conditions are favourable for intensification. The higher sea surface temperature and low vertical wind shear favoured the intensification of severe cyclonic circulation," said IMD in a series of tweets.

Explaining the nature of wind speed, IMD further tweeted, "Eye diameter is about 65 km as observed through Radar. thus the diameter has decreased during past 01 hours indicating intensification of the system. hence wind speed has increased from 85-95 kmph to 90-100 kmph gusting to 110 kmph."

Several National Disaster Response Force (NDRF) teams have been deployed across Maharashtra to ensure preparedness for the impending cyclone. A total of eight teams have been deployed in Mumbai, five teams in Raigad, two teams in Palghar, Thane, and Ratnagiri and one team in Sindhudurg, said NDRF.

Besides, five NDRF teams were airlifted by IL-76 from Vijaywada for Mumbai on June 2, as per the Indian Air Force (IAF)

"Around 60 per cent of people, from the coastal areas around this area, have gone to their relatives' places. The remaining ones have been sent to the evacuation centre. We have also taken into account the COVID-19 guidelines and ensured social distancing," NDRF officer Shiv Parada Rao, deployed with his team in the Dahanu area, spoke to ANI.

"From the information we have received cyclone Nisarga is likely to hit here by tonight. The exact time is not confirmed yet. We are taking all preparedness measures to tackle the situation," he added.

NDRF teams also conducted evacuation in Alibaug during the early hours on Wednesday morning, as per NDRF Director General SN Pradhan.

As per the 5 am bulletin released by IMD, cyclone Nisarga was heading towards north Maharashtra coast at a speed of 11 kmph. It was about 200 km South -SouthWest of Alibag and about 250 km south-southwest of Mumbai at 2.30 AM today, stated the bulletin.

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News Network
June 30,2020

Srinagar, Jun 30: On the deadly attack at Karachi Stock Exchange on Monday morning, a Kashmiri social activist and journalist warned that the incident is a stark reminder to all those in Pakistan supporting Jihad and attacked Pakistan prime minister Imran Khan for ignoring development agenda in Balochistan.

Yana Mir, the editor-in-chief of The Real Kashmir News, said, "Karachi Stock Exchange attack is a reminder to all those in Pakistan supporting Jihad. Remember @imrankhan that Youth is restless and they want development agenda. These young boys of BLA are also looking for a life which is settled and peaceful. Wake up Imran Khan and you Kashmiris also. Pakistan is going to finish you. Open your eyes."
Four heavily armed terrorists attacked the busy Pakistan Stock Exchange building in Karachi with grenades today, killing four security guards and a police officer before being shot dead in an exchange of fire, authorities said.

The terrorists, who arrived in a car, stormed the Karachi Stock Exchange building by firing indiscriminately and lobbed grenades at the main gate of the multi-storey building situated in the city's high-security commercial hub.

Balochistan is a well-known region rich in natural resources but the Balochis have always been deprived of basic facilities. No hospitals are available in Balochistan. If there are some then medical facilities and equipment are not available in hospitals. The education system is pathetic and similar is the case with the infrastructure: the roads, water system, agriculture and almost all fields of life.

It is pertinent to mention that enforced disappearances and abductions by the Pakistani military establishment have also been carried out regularly and for innumerable times in Balochistan. Leaders, activists, and vocal members of various student organizations have been detained by the security forces and kept in confinement. While others have been shot dead.

This crime against humanity has been going on for so long and so systematically in Balochistan that it has come to be considered as a normal state of affairs in the province. Many social and human rights activists have flagged the issue of oppression by the Pakistani establishment before the United Nations and other international agencies.

According to the Commission of Inquiry on Enforced Disappearances, an entity established by the Pakistani government, about 5,000 cases of enforced disappearances have been registered since 2014. Most of them are still unresolved.

Independent local and international human rights organisations put the numbers much higher. Around 20,000 have reportedly been abducted only from Balochistan, out of which more than 2,500 have turned up dead as bullet-riddled dead bodies, bearing signs of extreme torture.

Before being elected as Prime Minister, Imran Khan had admitted in multiple interviews about the involvement of Pakistan's intelligence agencies in enforced disappearances as well as extrajudicial killings and vowed to resign if he was unable to put an end to the practice, holding those involved responsible. But times have passed and only reports are available to narrate the true story.

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Agencies
May 14,2020

Mumbai, May 14: The Shiv Sena on Thursday raised questions over the Centre's Rs 20 lakh crore stimulus package announced to revive the COVID-hit economy, and asked if India is not a "self-reliant" country at present.

An editorial in Sena mouthpiece 'Saamana' wondered how Rs 20 lakh crore will be raised, and opined that an environment needs to be created where industrialists, trade and business sectors are encouraged to invest.

On the path of new self-reliance, India cannot afford industrialists running away, and for that "political institutions like the ED and CBI need to be put in lockdown for some time," it said.

Prime Minister Narendra Modi on Tuesday announced new financial incentives on top of the previously announced packages for a combined stimulus of Rs 20 lakh crore, saying the COVID-19 crisis has provided India an opportunity to become self-reliant and emerge as the best in the world.

The Sena said the country is being told that the package will be beneficial for MSMEs (micro, small and medium enterprises), poor labourers, farmers and the tax-paying middle class.

"The package (as per the Centre) will reach 130 crore Indians and the country will become self-reliant. Does this mean India is not a self-reliant country at present?" the Marathi daily asked.

It is good that PPE kits and N95 masks are now being manufactured in India, it said.

"Any country progresses ahead while learning from crisis and through struggle. Before Independence, not even a needle was manufactured in India but in 60 years, India became self-reliant in science, technology, agro business, defence, manufacturing and atomic science," it said.

An institution like the Indian Council of Medical Research (ICMR), which is helping in the manufacturing of PPE kits, is part of the self-reliant India, it noted.

Wondering how Rs 20 lakh crore, as announced in the central package, will be raised, the Sena said an "environment needs to be created where industrialists, trade and business sectors will be encouraged to invest".

"India, on path of new self-reliance, cannot afford industrialists running away, and for that political institutions like the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) need to be put in lockdown for some time," the paper said.

Despite announcing the 'lockdown-4' and the economic package, why its impact has not been reflected in the share market? it asked.

"Investors are in a dilemma. The prime minister and chief ministers must show them trust and support," it said.

"Earlier it was Pandit Nehru and now it is Modi. If (former prime minister) Rajiv Gandhi had not laid the foundation of a digital India, there wouldn't be video conference of PM, CMs and bureaucracy in times of coronavirus," the Uddhav Thackeray-led party said.

It agreed with Modi that coronavirus will stay for long, and lives need not revolve around it.

"We need to get back on our feet again," the Sena said.

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