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Arrest warrant issued against Ami Modi

On 25th August, 2020 The Interpol issued a global warrant against Nirav Modi’s wife, Ami Modi in the Punjab National Bank (PNB) fraud case. Ami Modi, the prime accused in the Rs.11,000 crore PNB fraud case, has been issued a ‘red notice’ arrest warrant on the basis of money laundering, on the request of the Enforcement Directorate (ED). The Interpol has asked its 192 member countries to arrest or detain the person if spotted in their country after which deportation proceedings can begin.

The Punjab National Bank scam relates to the fraudulent letter of undertakings worth Rs.11,000 crore issued by the bank. The main persons involved in this scam are said to be Nirav Modi, Ami Modi, his uncle Mehul Choksi and two rogue employees from PNB.

What is the scam exactly though? The scam refers to the issue of a fake letter of undertakings (LoUs) by a rogue employee at PNB's Brady House branch in Fort, Mumbai. A Letter of Undertaking is a provision of bank guarantees under which a bank can allow its customer to raise money from another Indian bank's foreign branch in the form of a short term credit for which the customer is supposed to pay margin money to the bank that issues the LOU and accordingly, they are granted a credit limit.

In Nirav Modi’s case, there was no credit limit and neither did he pay any margin money. This credit is meant for a short period only which in this case is allegedly extended far beyond the time limit set in the rule book, i.e 90 days. Nirav Modi got his first fraudulent guarantee from PNB on March 10, 2011 and managed to get 1,212 more such guarantees over the next 74 months.

The Punjab National Bank lodged an FIR with the CBI on 29th January, 2018 for a fraudulent LoU worth Rs.280.7 crore. In the complaint three diamond firms were mentioned. They were Diamonds R Us, Solar Exports and Stellar Diamonds. But in the course of investigation, it was unveiled that the scam was over Rs.11,000 crore.

Nirav Modi and his family had departed from India prior to the uncovering of the scam. However, Mr. Modi was arrested in March, 2019.

He is now lodged in the UK jail after being arrested in London and is fighting for extradition to India. The judgement at the Westminster Magistrate Court hearing in London on 27th August, 2020 was the second leg of Modi's extradition trial scheduled between September 7th and 11th. The next month’s hearing completes the prima facie case. Additional hearings have also been scheduled in November but any judgment in this case is now expected only after the final hearing in December. Ami Modi is considered as a co-conspirator in this fraud case and is now to be detained in any country that she’s present in.

Reporter: Disha Srinath

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