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Nirav Modi, an Indian jeweler and billionaire, has been accused of defrauding the state-run Punjab National Bank, PNB, for over US$1.73 billion. Several others are also being accused of participating in the scam.
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Nirav, who helped raise funds for current Prime Minister Narendra Modi's campaign, has denied any involvement. Bank members helped the suspects steal billion of dollars by helping them obtain fraudulent advances for payments to overseas suppliers worth about US$1.8 billion from the state-run bank.
Narendra, a right-wing leader of the Bharatiya Janata Party, or BJP, ran his political campaign on the slogan "Neither would I take bribes, nor I would let anyone else take them." Following the revelation of his alleged involvement, the political leader has come under major scrutiny, even from allies like Shiv Sena, a far-right regional political party.
Shiv Sena published a scathing editorial in its publication, Saamana, accusing Nirav of being a "partner" of the BJP.
"Talks of a corruption-free India and transparent government have been laid bare in just three years. Farmers are committing suicide as they cannot repay their debts ... but here people have absconded (after swindling) lakhs of crores," the editorial said, according to The Hindu.
"Prime Minister Narendra Modi’s election slogan ‘Na khaunga, na khane dunga’ proved ineffective in this case. An FIR had been lodged against Nirav earlier. How did he then manage to go to Davos and meet PM Modi, along with other industrialists?"
Police on Monday arrested three PNB bank employees: a chief manager in charge of the foreign exchange department; a manager in the same department; and another bank officer, according to a source at the CBI. The source reportedly assisted in the scam, which occurred at a single Mumbai branch in 2011, but came to light only a few days ago.
Lookout notices have also been issued for Mehul Choksi, Nirav's uncle, who serves as chairman of Gitanjali Gems. Both Nirav and Choski are currently overseas.
"It has come to light that Nirav Modi left the country in January. However, he was seen with the Prime Minister in Davos just a few weeks ago (during the World Economic Forum). Nirav Modi has been a partner of the BJP and was at the forefront in helping the BJP collect funds for their elections," Shiv Sena's editorial further stated.
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Shirking responsibility, India's finance ministry has placed the blame on the Reserve Bank of India, RBI, for not detecting the fraud earlier.
"Either the framework designed by RBI to prevent and detect such frauds is inadequate or RBI is unable to ensure its effective implementation," a ministry-issued letter to the RBI said.
Vijay Aggarwal, Nirav's lawyer, told Reuters that all transactions with PNB were documented and allegations made by the Central Bureau of Investigation, CBI, were unfound.
"Everything is documented," Aggarwal told Reuters over the phone.
A 47-year old diamantaire, Nirav has been embroiled in corruption charges before.
In 2014, Nirav came under the Directorate of Revenue Intelligence, DRI, for an alleged diversion of imported, duty-free, cut and polished diamonds and pearls to the domestic market, calling it a violation of import-export norms.
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