NEW DELHI — Indian investigators Feb. 16 ordered two wealthy jewelers to be questioned about an alleged $1.8 billion scam at a large state-owned bank, a news report said.
The summons came one day after authorities raided the homes and offices of Nirav Modi and his business partner Mehul Choksi, seizing nearly $800 million in jewels and gold, the Press Trust of India news agency reported. The men, who are thought to have left India in early January, before the scam was discovered, have been ordered to appear within a week, it and other reports said.
Nirav runs an international jewelry empire that reaches from India to New York, with a string of high-end brands.
Authorities have not publicly charged the men in the $1.8 billion fraud but say both are under investigation for allegedly cheating Punjab National Bank of $43 million using fake bank documents. Bank officials say the scam appears to have begun in 2011 and occurred at just one Mumbai branch of the enormous state-run bank. The official complaint over the $43 million fraud says the two men, along with Modi’s wife and brother, worked with a pair of bank employees to get fake “letters of understanding.” Bank officials say the letters were sent to overseas offices of Indian banks, which made the actual loans. Numerous Indian news reports say the $43 million is just one part of the $1.8 billion fraud.
Neither man has made any public statements in recent days, but the company that Choksi runs, Gitanjali Gems, has said Choksi has no connection to many of the firms listed in the $43 million complaint. In a statement, Gitanjali said Choksi “has been falsely implicated in the first place.”
Many of the details of the fraud remain unclear, including whether all the $1.8 billion is missing, or if some money may have been used to repay earlier loans.