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
May 12,2020

London, May 12: British Prime Minister Boris Johnson has warned that a mass vaccine for the novel coronavirus may be over a year away and, in the worst-case scenario, may in fact never be found.

In his foreword to the government’s new 50-page guidance on a step by step easing of the lockdown measures in place to control the spread of the deadly virus, the UK prime minister lays out plans for businesses to gradually start reopening with “COVID-19 Secure” measures of social distancing and for the public to use “good solid British common sense” as the economy is unlocked.

“A mass vaccine or treatment may be more than a year away,” said Johnson, highlighting the work being done in the UK by scientists at Oxford University and Imperial College London towards this mission.

“Indeed, in a worst-case scenario, we may never find a vaccine. So our plan must countenance a situation where we are in this, together, for the long haul, even while doing all we can to avoid that outcome,” he said.

Admitting that a vaccine or drug-based treatment is the only “feasible long-term solution”, he said the UK has accelerated this with “promising” vaccine development programmes and a collaboration between Oxford University and pharma major AstraZeneca was a vital step that could help rapidly advance the manufacture of a Covid-19 vaccine when it is ready.

As part of global efforts, he flagged the GBP 388 million in aid funding for research into vaccines, tests and treatment, including GBP 250m to the Coalition for Epidemic Preparedness Innovations.

“But while we hope for a breakthrough, hope is not a plan,” he said, as he unveiled his plan for starting to lift lockdown restrictions from this week in phases.

Following a televised address to the nation on Sunday night and a statement in Parliament on Monday, the guidance comes into effect in public life across England from Wednesday when people will be allowed one-to-one contact with people other than those they live with, as long as they remain outside and two metres apart.

They are allowed to play sport with a friend or family member from outside their household or socialise with them in the open air for the first time in more than six weeks since the lockdown was imposed.

People are still advised to work from home where possible but start heading into work where necessary, in sectors such as construction and manufacturing, keeping the social distancing norms in place.

Under the step by step plan, by the start of next month non-essential shops will also reopen, with some hairdressers, pubs and cinemas to follow from July. However, as part of a Covid-19 Alert System, if infection rates are seen to be rising again, restrictions would be tightened “possibly at short notice”.

Fines for breaching the new rules will also be increased to GBP 100 and will double for each repeat offence, up to a maximum of GBP 3,200.

Johnson said: "I must ask the country to be patient with a continued disruption to our normal way of life, but to be relentless in pursuing our mission to build the systems we need. The worst possible outcome would be a return to the virus being out of control – with the cost to human life, and – through the inevitable re-imposition of severe restrictions – the cost to the economy. We must stay alert, control the virus, and in doing so, save lives.

“Then, as vaccines and treatment become available, we will move to another new phase, where we will learn to live with Covid-19 for the longer term without it dominating our lives.”

The devolved administrations of Scotland and Wales are putting their own measures in place and keeping the “stay at home” message in place, rather than switch to the new “stay alert” message.

The UK government’s latest messaging has come under attack from the Opposition and other sections of society over a feared lack of clarity for the general public.

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News Network
February 5,2020

Chennai, Feb 5: The popular cine actor Rajinikanth has defended the Union Government on the Citizenship Amendment Act, saying it will not affect the Indian Muslims.

In a brief interaction with reporters this morning in Chennai, the matinee idol said if the Muslims are affected by the CAA, he would be at the forefront in their defence. He asked how will the legislation affect the Indian Muslims when they chose to stay back in the country to make it their motherland. Mr Rajinikanth also supported the National Population Register saying it has been in force even in the past.

On the NRC, Mr Rajinikanth said the Government has already made it clear that its nationwide rollout has not been even discussed so far. Mr Rajinikanth is nourishing political ambitions and has made it clear that he would plunge into politics ahead of the Tamil Nadu Assembly Elections in the state which is due in 2021.

Comments

Arif
 - 
Wednesday, 5 Feb 2020

This law violates the fundamentals of the Indian constitution. Whey they are seeing the Muslims angle first?

 

It looks that they are misinforming the public by diverting into a Muslim only issue. If that was the case, why so many non-Muslims are protesting? I looks like Rajini has back-end support to the center's CAA move.

 

Suresh SS
 - 
Wednesday, 5 Feb 2020

He is another crack, hamare desh main pagal logon ki kami nahi

Wellwisher
 - 
Wednesday, 5 Feb 2020

What can expect from ex KSRTC bus conductor

 

 
clear sign of ZERO knowedge with Indian constitution.

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News Network
February 14,2020

New Delhi/Washington, Feb 14: India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during US President Donald Trump's first official visit to the country this month, people familiar with the protracted talks say.

India, the world's largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80 million rural households involved in the industry.

But Prime Minister Narendra Modi is trying to pull all the stops for the US President's February 24-25 visit, aimed at rebuilding bonds between the world's largest democracies.

In 2019, President Trump suspended India's special trade designation that dated back to 1970s, after PM Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.

President Trump's trip to India has raised hopes that he would restore some of the country's US trade preferences, in exchange for tariff reductions and other concessions.

The United States is India's second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.

India has offered to allow imports of US chicken legs, turkey and produce such as blueberries and cherries, government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent. US negotiators want that tariff cut to 10 per cent. The Modi government is also offering to allow some access to India's dairy market, but with a 5 per cent tariff and quotas, the sources said. But dairy imports would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.

New Delhi has also offered to lower its 50 per cent tariffs on very large motorcycles made by Harley-Davidson, a tax that was a particular irritant for President Trump, who has labelled India the "tariff king." The change would be largely symbolic because few such motorcycles are sold in India.

President Trump will be feted in PM Modi's home state of Gujarat, then hold talks in New Delhi and attend a reception that the hosts have promised will be bigger than the one organised for former president Barack Obama in 2015.

But it is far from clear whether India's offers will be enough to satisfy US Trade Representative Robert Lighthizer, who cancelled plans for a trip to India this week. Instead, he has held telephone talks with Commerce Minister Piyush Goyal.

The US dairy industry remained sceptical on Thursday that a viable deal is at hand.

"We're always looking for market access, but in terms of India, as of today I'm not aware of any real progress going on," said Michael Dykes, president of the International Dairy Foods Association and a member of USTR's agricultural trade policy advisory committee.

Mr Dykes said the US dairy industry was looking for access in viable commercial quantities.

A USTR spokesman and India's trade ministry did not respond to requests for comment.

A parliament panel is reviewing a draft data privacy law that imposes stringent controls over cross-border data flows and gives the government powers to seek user data from companies.

It is not clear whether it will be passed, or in what form, but the possibilities have unnerved US companies and could raise compliance requirements for Google, Amazon.com Inc, and Facebook.

The draft law is not part of the trade discussions, Indian officials say, because the issue is too difficult to resolve at the same time.

"The privacy and localization piece will be raised independently and in concert with the trade discussions," said a Washington-based source with knowledge of the US administration's thinking.

President Trump on Tuesday was non-committal about sealing a trade deal before his visit. "If we can make the right deal, we'll do it," he told reporters.

Two US sources said progress had been made on proposed alterations to the medical device price caps. India's new import tariffs on medical devices, walnuts, toys, electronics and other products on February 1 surprised US negotiators, however.

The new tariffs were aimed at China, which also makes medical devices, according to an Indian government source. "We have to protect our market and our companies," the source said.

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