Nirav Modi refuses to join CBI probe, cites ‘business abroad’

NEW DELHI, Feb 28: Billionaire Nirav Modi has refused to join CBI investigations into the Punjab National Bank (PNB) fraud case, officials said on Wednesday.

Modi was asked to appear before the agency in connection with its probe into Rs 12,636 crore alleged fraud involving the jeweller merchant, his uncle Mehul Choksi and their associates.

He was summoned through email but he refused to join the investigation saying he has “business abroad”, the officials said.

The CBI also directed him to contact the embassy of India in a country where he is staying so that his travel to India can be arranged, they said.

Nirav Modi gives ‘repay’ plan, I-T issues blue corner notice

NEW DELHI, Feb 28: Under-fire diamond merchant Nirav Modi has given a ‘concrete proposal’ to Punjab National Bank (PNB) offering it jewellery worth Rs 2,000 crore, current account deposits amounting to Rs 200 crore and immoveable properties of Rs 50 crore to settle of his liabilities even as the Central Bureau of Investigation (CBI) continued its probe, and arrested the bank’s chief internal auditor on Wednesday.

Modi wrote a letter to PNB on February 26, a source familiar with the matter said, saying the communication was in response to the bank’s letter asking to provide an implementable and concrete plan to return his dues.

Modi’s offer comes at a time when the Bureau of Immigration issued a Blue Corner Notice against him and his uncle Mehul Choksi on Wednesday in connection with the Rs 12,600-crore Punjab National Bank (PNB) fraud case.

The notice was issued on the request of the Income Tax department.

PNB has accused Modi and Choksi (who owns Gitanjali Jewels) of committing a fraud of more than Rs 12,600 crore in the issuance of Letters of Understanding and foreign letters of credit from the Brady House branch between 2011 and 2017.

A Blue Corner notice is issued to locate, identify or obtain information on a person of interest in a criminal investigation, and, in this case, will be valid for a year starting February 22 at all ports of embarkation.

Meanwhile, the I-T department attached four more properties of the Nirav Modi group, including a Rs 13 crore farm house in Alibaug – around 100 km south of Mumbai – and a 5.24MW solar power plant spread over 135 acres of land in Ahmednagar worth Rs 70 crore, as per official records. Ahmednagar is around 270km east of Mumbai. The department also attached 34 more bank accounts and fixed deposits of the Gitanjali Group with a balance of Rs 1.45 crore.

The CBI also arrested PNB’s chief auditor MK Sharma, a chief manager-ranked official. CBI officials said he was responsible for auditing the practices of the Brady House branch.

According to a person familiar with the content of Modi’s letter, “Modi has told the bank that his intention was to resolve the matter and ensure justice is served to all.” Modi is believed to have told the bank that the seizure of his assets and the crackdown against him have brought company operations to a standstill.

A person familiar with the development said, “He has told the bank to take charge of his companies under a relevant Act and operate them in order to ensure that employee dues are cleared. The ED-CBI investigation and action are eroding the value of his companies.”

The CBI has asked Modi to return to India and join the investigation. “He had written to us saying he cannot appear in front of our investigators,” a CBI officer said.

Aircel files for bankruptcy; cites unsustainable debt

MUMBAI, Feb 28: Debt-laden telecom operator Aircel has filed for bankruptcy as “the company could not reach consensus with respect to restructuring of its debt and funding”. The filing was made in National Company Law Tribunal (NCLT), Mumbai, after a Joint Lenders’ Forum meeting.

Aircel, which has a debt of close to Rs 15,500 crore, said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant “negative business and reputational impact” on the company. “The board of directors of the corporate debtor today announced that they have filed an application under Section 10 of the Insolvency and Bankruptcy Code 2016 for undertaking corporate insolvency resolution process for the respective companies: Aircel Cellular, Dishnet Wireless, Aircel Ltd,” an Aircel statement said.

Lenders had earlier asked Aircel promoter, Malaysia-based Maxis, to invest at least $1 billion into the company so that it can meet financial obligations. Aircel has already defaulted on repayment of interest on its debt obligations due to its weak liquidity position, which worsened after the launch of Jio’s free services in September 2016.

In 2016, the company embarked upon a merger of its wireless business with Reliance Communications. However, on account of various issues and hurdles faced, the merger did not succeed and ultimately lapsed in September 2017.

“Post detailed discussions with the financial lenders and shareholders, the Company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018 pursuant to the then guideline of the Reserve Bank of India (RBI), no agreement could be reached. Under current circumstances, especially after the February 12, 2018, RBI guidelines, the company believes resolution process under the code is an appropriate recourse,” it added.

Maxis holds a 74 per cent stake in the company, while the remaining 26 per cent is held by Sindya Securities & Investments.

The company also said it believes that in the current circumstances, resolution process under the Insolvency and Bankruptcy Code is an “appropriate recourse”. “The company would like to emphasise that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc) to protect and preserve the value of the company and manage the operations,” it added.

Aircel said it will strive to provide uninterrupted service connectivity to its customers and sought their support in the “current difficult period”.

According to Indian Banks Association estimates, the total liabilities of the telecom sector stood at Rs 775,000 crore as of March, 2017 of which bank borrowings and liabilities towards spectrum payment to the telecom department stood at Rs 580,000 crore.

Companies in the telecom sector have been battling pressure on margins and revenue streams after the entry of Reliance Jio Infocomm in September last year, which after offering free services for almost seven months announced an intense tariff war by way of rock-bottom data prices.

Modi says system will ‘not tolerate loot of public money’, promises strict action on PNB fraud

NEW DELHI, Feb 23: Prime Minister Narendra Modi on Friday said his government will take stringent action against financial irregularities and not tolerate loot of public money, breaking his silence more than a week after India’s second largest bank PNB said it had been defrauded of over Rs 11,400 crore.

Days after the fraud allegedly masterminded by diamantaire Nirav Modi came to light, the Prime Minister asked the management of financial institutions as well as the supervisory bodies to do their job diligently to check such instances.

“I want to make it clear that this government has been taking strict action against financial irregularities and will continue to take strict action,” he said at Global Business Summit organised in New Delhi. “System will not tolerate loot of public money,” he added.

Nirav Modi, whose diamond creations have draped Hollywood stars such as Kate Winslet and Dakota Johnson, and firms linked to him are alleged to have acquired fraudulent letters of undertaking (LoUs) from one PNB branch in Mumbai between 2011 and 2017 to obtain loans from Indian banks overseas. Investigative agencies have raided Modi’s properties and arrested bank employees.

Without naming either Nirav or the Punjab National Bank (PNB), the Prime Minister said the management of financial institutions, auditors and regulators should perform their duty with full dedication.

“I want to make an appeal to those who have been entrusted with the job of framing rules and policies and maintaining ethics to do their job diligently and with dedication,” he said, adding this should specially be followed by those who have been entrusted with the responsibility of supervision and monitoring.

Nirav Modi’s passport revoked, Mehul Choksi tells employees he can’t pay their dues

NEW DELHI, Feb 23: The government on Friday revoked the passport of disgraced diamond czar Nirav Modi even as his maternal uncle Mehul Choksi wrote to his employees telling them that he would not be able to pay their dues.

Modi and Choksi are facing multiple investigations into one of the biggest frauds in the country’s banking history and are accused of defrauding India’s second biggest lender, Punjab National Bank, of an estimated Rs 11400 crore with the help of a couple of bank employees.

Both deny any wrongdoing.

“The ministry of external affairs (MEA) sent an email informing Nirav that his passport stands revoked under section 10 (3) (C) of the Passport Act,” said a person familiar with the matter.

Section 10 (3) (C) of the Act says that a passport can be revoked in the interests of the sovereignty, integrity, security of the country or friendly relations of India with any foreign country, or in the interests of the general public. Revoking the passport of an accused is aimed at stopping the person from travelling from one country to another to avoid arrest.

“Nirav replied to the notice raising objections on the notice of revocation issued to him but soon the ministry responded to his email telling him that the passport has been revoked,” added the person.

Modi’s lawyer, Vijay Aggarwal, however, criticised the government move.

“The passport of my client has been revoked in violation of the guidelines and court rulings in this regard as at the moment, there is only an FIR against him, no prosecution has been launched. We may approach court against the order,” Aggarwal said.

The MEA on February 16 had suspended the passport of Nirav Modi on the request of the Enforcement Directorate (ED), India’s financial crime probe agency, and issued him notice asking why his passport should not be revoked altogether.

Nirav along with his wife Ami, brother Neeshal and Mehul Choksi left India in the first week of January before the Punjab National Bank accused them of committing the fraud. They have not returned to India since then.

The CBI and ED have launched probe against them on charges of corruption and money laundering.

Nirav wrote to his employees few days back asking them to look for job opportunities elsewhere as he could not be able to pay them.

Choksi too has written to his employees that he has been facing a lot of problems due to the manner in which “multiple investigating agencies have started to create havoc”, which are “hell bent on stopping the operations”.

“I will face my destiny and I know I have done nothing wrong and ultimately, the truth shall prevail,” said Choksi in the letter provided to HT by his lawyer Sanjay Abbot. Abbot said the letter has been issued to around 3500 employees based in India.

“We don’t know how many employees will get the letter as Choksi’s server has been seized by investigation agencies,” added Abbot.

Choksi said the investigating agencies are creating a fear psychosis among his employees.

“This kind of unfair treatment, unfair investigation, media frenzy and political statements are making me highly insecure about the safety of myself and my family members,” Choksi wrote.

He told the employees that he didn’t want them to suffer because of their association or connection with him and therefore they should look for jobs elsewhere.

Choksi also asked them to retain their office laptops and mobile phones till their dues are cleared.

GST Network simplifies GSTR -3 filing process

NEW DELHI, Feb 22: In a move to make filing of returns taxpayer friendly and error-free, the Goods and Service Tax Network (GSTN), the firm that processes tax returns in the indirect tax regime, has simplified the monthly return of sales summary that businesses and traders have to file.

GSTN said in a statement on Wednesday that filing of GSTR-3 has been made more convenient and easy.

One area of improvement is the utilization of tax rebates and making the remaining payment in cash, which was an area where a few taxpayers were frequently erring, the statement said, quoting GSTN chief executive Prakash Kumar.

“By improving the user interface and redesigning the process, filing of GSTR-3B has been made considerably convenient. We expect the user experience will be far better and the process of filing will be now more convenient. We anticipate our taxpayers to experience limited scope for errors in filing returns, save time, and increase the speed and accuracy in return filing,” said the statement, quoting Kumar.

Experts said after the simplification, the tax amount due is visible to the assessee even before submitting the return.

According to Pratik Jain, partner and leader of indirect tax at PwC India, the changes are a welcome step towards making the tax filing process more user-friendly. “It makes the system less rigid and reduces the chances of inadvertent errors. With this, hopefully, the businesses would find it easier to file returns which would in turn increase the level of compliances,” said Jain.

GSTN and federal tax body GST Council have been working on simplifying the return filing process to increase tax compliance.

GSTN chairman Ajay Bhushan Pandey said on Wednesday that as many as 55 lakh GST returns have been filed for the month of January so far. The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.

India will chase down PNB cheaters: Jaitley

NEW DELHI, Feb 20: Breaking his silence over the Rs 114 billion fraud at India's second-biggest bank, PNB, Finance Minister Arun Jaitley on Tuesday said the state will chase down whosoever cheats the banking system.

Without naming Punjab National Bank or the alleged kingpin of the scam Nirav Modi, Jaitley said bank management did not live up to their task as it failed to detect the delinquent.

He went on to blame auditors for being unable to detect irregularities and asked supervisory agencies to assess the system requirement to detect such frauds. He said supervisory agencies should ensure that stray cases are nipped in the bud and they are never repeated.

Earlier, Nirav Modi wrote to banks, saying that the firms controlled by him were unable to clear their dues because of the actions taken in "haste" by PNB. Further, he asked the banks to pay salaries to the 2,200 employees working in those firms.

Here are what Modi wrote in his letter and the top developments in the largest banking scam in the country's history:

1) 'Nirav Modi won't be found guilty': Nirav Modi's lawyer Vijay Aggarwal has said that the case against his client will collapse just like the 2G scam and the Bofors matter.

Aggarwal said that the probe agencies would not be able to prove the charges against Nirav Modi in the court of law.

"Like 2G Scam and Bofors matter, this case will also collapse. Agencies are making noises in the media but they will not be able to prove the charges in a court of law. I am sure Nirav Modi will not be found guilty," the lawyer said.

2) Fitch move hints at the possibility of PNB ratings downgrade: On Tuesday, US ratings agency Fitch placed PNB on 'Rating Watch Negative' (RWN), reflecting the possibility of a downgrade following the fraud.

The fraud has raised questions on both internal and external risk controls as well as the quality of management supervision considering that the fraud went undetected for several years, Fitch said. "Fitch Ratings has placed Punjab National Bank's (PNB) Viability Rating of 'bb' on Rating Watch Negative (RWN), following the large fraud reported by PNB," the US-based agency said in a statement.

The Viability Rating measures creditworthiness of a financial institution and reflects the likelihood of the entity to fail, as per Fitch.

The RWN reflects the possibility of a downgrade of PNB's Viability Rating.

"Fitch will resolve the Rating Watch once more clarity emerges on the extent of control failures and the impact on PNB's financial position," it added. Stating that the fraud event has been a setback for the bank in its reputation and has had a capital market impact, Fitch said it will monitor PNB's full liability, potential recoveries and the extent of additional fresh capital from both internal and external sources to determine if the bank's financial position is no longer consistent with the current viability rating.

3) Nirav Modi, the alleged kingpin of the largest banking scam in the country's history, has said PNB's overzealous approach shut the doors on his ability to clear the dues. "In the anxiety to recover your dues immediately, despite my offer, your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts," Modi said in his letter to banks.

He said the operations of his companies Firestar International Private Ltd (FIPL) and Firestar Diamond International Private Ltd (FDIPL) had effectively ceased owing to raids launched by investigative agencies, including the Enforcement Directorate and the Central Bureau of Investigation.

4) Modi claims his companies owe only Rs 50 billion: Modi also said the dues were much less than what the bank has claimed, and that his relatives booked in the cases filed by the central agencies had nothing to do with the operations of the firms under their scanner. In a letter Modi had written on February 15-16 to the Punjab National Bank management, Modi pegged the money his companies owed to the bank at under Rs 50 billion (Rs 5,000 crore).

PNB, the second-largest state-run bank, had, on February 14, informed the exchanges about detecting a $1.77-billion fraud at its Brady House branch in Mumbai, and named the firms led by Modi and his uncle Choksi's Gitanjali Group, and some other diamond and jewellery merchants, as suspects.

Central government agencies, the CBI and the Enforcement Directorate, have registered cases on the complaint by the bank, and launched nationwide searches on dozens of offices and residences of the alleged fraudsters. The bank has named Modi's brother, his American wife Ami, and uncle Choksi, besides some others, in the FIR.

On the over Rs 110-billion (Rs 11,000-crore) loss claimed by PNB in its FIR, Modi said, "As you are aware, this is entirely incorrect and the liability of the Nirav Modi Group is substantially less...."

"The erroneously cited liability resulted in a media frenzy which led to immediate search-and-seizure operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going concerns," his letter said.

5) Nirav Modi has asked the banks to pay salaries to the 2,200 employees working in those firms. "I would request you to permit salaries for FIPL and FDIPL to be paid for the 2,200 employees from the balance lying in the current accounts. Our HR head will send you a breakup of the monthly salary," Modi, who left the country along with his family in the first week of January, before the alleged scam became public, wrote in the letter.

6) Nirav Modi requested banks to allow him to sell the Firestar group. "Even after your complaint was filed, in good faith I wrote to you saying please sell/allow me to sell Firestar Group, or their valuable assets, and recover the dues not just from Firestar Group, but also from the three firms," Modi's letter said.

He said the inventory, including assets and receivables of FIPL and FDIPL and three other firms could have settled the pending dues to the banks. "However, now that stage appears to have passed, and there is a general panic," he said, adding that the valuation of the firms stood at Rs 65 billion.

7) He went on to state that PNB had time and again acknowledged that the buyer's credit facility had been extended by it to the three partnership firms for several years, and that there had been no default on the part of any of these firms over all these years.
He said that money went through PNB all these years for the repayments of the advances given by the overseas bank branches under the buyer's credit.

"That Firestar International and Firestar Diamond International have never been in default to any bank, and the bankers are fully secured". He also said that PNB had over the years been earning bank charges to the tune of billions of rupees on the buyer's credit facility extended by the bank to the three partnership firms. He added that PNB had extended the money to the firm's buyers as well, from where also it has been receiving full payments, with interest and on time, all these years.

8) The Union government has shot off a letter to the RBI on the alleged Rs 114-billion PNB scam, asking whether at any stage the banking regulator had detected the fraud, involving LoUs issued to foreign branches of Indian banks on behalf of Nirav Modi and Choksi companies.

"Under the Banking Regulation Act, the RBI has a major role related to inspection, regulation, audit and the oversight of banks. We have written to the RBI, asking how the alleged scam, which had been going on for years, went undetected, and whether the regulator exercised its role under the law," an official said on condition of anonymity.

9) The CBI on Monday arrested three more PNB officials after intense grilling during the day in connection with the scam involving billionaire jewellery merchants Nirav Modi and Mehul Choksi, officials said. The agency also started searches late Monday evening at group offices of Nirav Modi at Peninsula Business Park in lower Parel, Mumbai.

The total number of arrests by the CBI has risen to five -- four PNB officials and a retired employee of the bank -- after Monday's development.

Manoj Kharat, a single-window operator at PNB, and the retired employee Gokulnath Shetty were arrested earlier.

Bechhu Tiwari, the then chief manager in the forex department; Yashwant Joshi, Scale-II manager in the forex department; and Praful Sawant, Scale-I officer handling the exports section were arrested by the agency Monday evening, officials said. The agency had started searches at their residences located in Navi Mumbai, Andheri and Dombivilli, they said.

10) The public sector banks (PSBs) affected by fraudulent LoUs issued by PNB have told the government that PNB is wholly responsible for the alleged Rs 114-billion scam related to the groups of companies led by Nirav Modi and Mehul Choksi.

A senior banker disputed the claim made by PNB that the fraud went undetected because the bank's core banking system (CBS) was not integrated with the Society for Worldwide Inter-Bank Financial Telecommunication (SWIFT), a global financial messaging system that was used to instruct foreign branches of Indian banks to release money, amounting to Rs 114 billion over the years, for companies owned by Nirav Modi and Mehul Choksi. The executive also said all the LoUs issued by PNB were genuine and in accordance with norms set out by the RBI.

"Once our foreign branches transferred the money to the PNB's nostro account how can it claim that the transaction was not recorded in its books? It should reflect in its accounts," the banker said on condition of anonymity.

Government Clears Opening Up Of Commercial Coal Mining To Private Firms

NEW DELHI, Feb 20: In a major reform in the coal sector since its nationalisation in 1973, the government today allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of state-owned Coal India Ltd (CIL).

The opening up of commercial coal mining for private sector is the most ambitious coal sector reform since the nationalisation of this sector, Coal and Railway Minister Piyush Goyal said while briefing the media on the decision taken in the Cabinet meeting.

Currently, private sector is allowed coal mining for captive use only.

The reform, Mr Goyal said, is likely to bring efficiency into the coal sector by moving away from the era of monopoly (of CIL) to competition and lower power tariffs. He said the move will lead to higher investments and create lakhs of direct and indirect jobs.

"It will increase competitiveness and allow the use of best possible technology into the sector. The higher investment will create direct and indirect employment in coal bearing areas especially in mining sector and will have an impact on economic development of these regions," the minister said.

The decision was taken by the the Cabinet Committee on Economic Affairs (CCEA) under the Chairmanship of Prime Minister Narendra Modi.

The CCEA has approved the methodology for auction of coal mines/blocks for sale of coal under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957, the coal ministry said in a statement.

Following nationalisation, only state-owned CIL was allowed to sell coal.

The minister said big, medium as well as small mines would be offered to private companies for mining.

Opening up the sector will also lead to energy security through assured coal supply, accountable allocation and affordability, he added.

The methodology gives highest priority to transparency, ease of doing business and ensures that natural resources are used for national development, the statement said.

"The auction will be an ascending forward auction whereby the bid parameter will be the price offer in Rs./tonne which will be paid to the State Government on the actual production of coal. There shall be no restriction on the sale and/or utilisation of coal from the coal mine," it said.

The move will lead to energy security as 70 per cent of country's electricity is generated from thermal power plants, the statement said, adding that this reform will ensure assured coal supply, accountable allocation of coal and affordable coal leading to affordable power prices for consumers.

"As the entire revenue from the auction of coal mines for sale of coal would accrue to the coal bearing States, this methodology shall incentivise them with increased revenues which can be utilised for the growth and development of backward areas and their inhabitants including tribals," the statement said, adding that the Eastern states will be especially benefited.

Mr Goyal said the move will help ramp up domestic production and reduce dependence on imports, which in turn will save the country precious foreign exchange.

The move will also help in bringing down power tariffs, he said.

West Bengal, Odisha, Jharkhand, Chhattisgarh, and Madhya Pradesh are the major coal bearing sates. India is believed to have reserves of 300 billion tonne.

When asked how the move would impact Coal India, Mr Goyal said competition would help the state-owned miner.

The Supreme Court had in September, 2014 cancelled 204 coal mines allocated to the different Government and private companies since 1993 under the provisions of Coal Mines (Nationalisation) Act, 1973.

To bring transparency and accountability, the Coal Mines (Special Provisions) Bill 2015 was passed by the Parliament which was notified as an Act in March, 2015. Enabling provisions have been made in the Coal Mines (Special Provisions) Act, 2015 for allocation of coal mines by way of auction and allotment for the sale of coal.

CIL currently accounts for over 80 per cent of domestic coal output.

Maharashtra Will Become First Trillion Dollar Economy In India: Modi

MUMBAI, Feb 18: Prime Minister Narendra Modi on Sunday said that Maharashtra will become the country's first trillion dollar economy. Speaking at the "Magnetic Maharashtra" Global Investors' Summit in Mumbai, PM Modi said Maharashtra's development was representative of the changes in the country.

The BJP-led government's budget reforms have created a new work culture and are transforming the socio-economic landscape of the country, PM Modi said at the event.

"Our budget is not limited to outlay, its focus is on outcome. Our reforms in budget making and presentation have created a new work culture and are transforming the socio-economic landscape," he said.

"We are moving in a direction where the state is policy driven, governance is performance driven, government is accountable and democracy is participative," he said at the event in suburban Bandra.

"We are working in times of disruptions and discontent," PM Modi added.

In the last three and half years, the government has transformed the country from being a fragile five' nation to one now aspiring USD 5 trillion GDP, he said.

In the last three and half years, the government has transformed the country from being a 'fragile five' nation to one now aspiring for $5 trillion GDP, he said.

A country progresses only when it has a vision and works for inclusiveness, PM Modi said. "Potential, policy, planning and performance leads to progress." He said the government in the last three years has repealed 1,400 laws and the new ones are being written with the intent of simplification, not to complicate (things).

On investments, he said there is a healthy competition among states to attract investments as per their strengths.

"What started with Gujarat is visible all across the country now. I congratulate Maharashtra government for the work on ease of doing business and making it easier for investors," he said.

The 'Samruddhi corridor' between Mumbai and Nagpur will help boost agriculture and agriculture-based industries, he said.

On the centre's development initiatives, PM Modi said, "We will create 1.5 lakh wellness centres in bigger gram panchayats".

Besides, PM Modi said, 10.5 crore people have been accepted under the MUDRA scheme and Rs. 4.60 lakh crore has been disbursed to small businesses.

PNB Rs 11,000 crore fraud case: ED raids Nirav Modi’s offices, CBI seals his house

NEW DELHI, Feb 15: The agency raided at least 12 properties including his jewellery showrooms as well as his corporate office in Lower Parel. The ED is probing Modi, who is currently abroad, under the Prevention of Money Laundering Act.

The Enforcement Directorate on Thursday conducted raids in multiple properties of billionaire diamond jeweller Nirav Modi across the country, a day after Punjab National Bank detected fraudulent transactions worth over Rs 11,000 crore.

Around 60 officials from the agency raided at least 10 properties including Modi’s jewellery showrooms as well as his corporate office in Mumbai, apart from locations in Surat and Delhi. The case is currently being investigated under the Prevention of Money Laundering Act (PMLA). Modi is out of the country.

The CBI also sealed Modi’s Mumbai flat today in connection with the case.

PNB informed the Bombay Stock Exchange on Wednesday of fraudulent transactions in its mid-corporate branch in south Mumbai. At least ten employees of PNB were suspended. Read: Who is Nirav Modi?

Modi, along with his wife Ami Modi, brother Nishal Modi and maternal uncle Mehul Choksi were booked by the CBI on January 31 for allegedly cheating PNB of over Rs 280 crore in 2017. They were booked under sections of the IPC for criminal conspiracy and cheating and provisions of Prevention of Corruption Act.

The CBI, in its FIR, said that a few public servants “committed abuse of official position to cause pecuniary advantage to Diamond R US, Solar Exports, Stellar Diamonds and wrongful loss of Rs 280.70 crore to Punjab National Bank during 2017”. Modi and the others accused are partners of these firms, the CBI FIR added.

The ED had filed a case under the PMLA based on the CBI’s FIR, reported PTI. The CBI will reportedly probe the involvement of bank officials in the fraud, while the ED will look into violation of foreign exchange and anti-money laundering norms if any.

PNB Hands Over To CBI List Of 150 Fraudulent LoUs Issued To Nirav Modi

The bank again approached the CBI within a fortnight of the first complaint giving details of more transactions which were over Rs. 11,400 crore.

NEW DELHI: Billionaire jewellery designer Nirav Modi and other members of his family, who fled the country last month, allegedly made fraudulent transactions of over Rs. 11,400 crore through 150 letters of understanding issued by the Punjab National Bank, officials said.

Nirav Modi, who holds an Indian passport, left India on January 1, while his brother Nishal, a Belgian citizen, also left the country on same day. However, whether they travelled together has to be probed, they said.

Nirav Modi's wife Ami, a US citizen, left on January 6 and his uncle and business partner Mehul Choksi, the promoter of Gitanjali jewellery chain, left on January 4, the officials said.

The bank became suspicious only on January 16 when the accused companies --Diamond R US, Solar Exports and Stellar Diamonds (all accused in the CBI FIR) -- approached it with import documents and a request to issue Letters of Understanding (LoUs) for raising buyers' credit for making payments to the overseas suppliers.

The bank, however, could not find any past entries in the system, the FIR has alleged.

It approached the CBI on January 29 with a complaint of Rs. 280 crore fraud, officials said.

Nirav Modi, who is believed to be in Switzerland, was also present in a group photograph of Indian CEOs with Prime Minister Narendra Modi, issued by the Press Information Bureau, during the World Economic Forum on January 23, six days before the bank sent its first complaint against him to the CBI, according to the officials.

The agency immediately swung into action registering an FIR on January 31 followed by searches at 20 locations in Mumbai and Surat and issued a look out circular on February 4 against Nirav Modi and three absconding accused, they said.

A look out circular is issued by enforcement agencies to all exit and entry ports to inform them about the movement of an accused.

Nirav Modi, a regular on the lists of rich and famous Indians since 2013, was booked by the CBI, along with wife, brother and business partner Choksi on January 31, for allegedly cheating the state-run Punjab National Bank to the tune of Rs. 280 crore.

The bank again approached the CBI within a fortnight of the first complaint giving details of more transactions which were over Rs. 11,400 crore.

The question why the PNB did not send a complaint to the CBI and decided to give it in tranches is also under the scanner of the agency, they said.

An LoU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.

The bank has claimed in three complaints to the CBI that so far it has detected 150 LoUs which were fraudulently issued by its officials in connivance with Nirav Modi and the other accused in the case, officials said.

The agency is analysing the fresh complaints and will take a call whether to register fresh FIRs or expand the ambit of the existing FIR related to fraudulent transactions of worth Rs. 280 crore, they said.

In these cases, the bank has alleged that the LOUs were issued to Hong Kong based branches of Allahabad and Axis bank, they said.

The PNB has claimed in the complaint that overseas branch of banks used the funds to clear their own liabilities, the officials said.

During searches conducted by the agency which included the residences of Nirav Modi and the other accused along with companies, the CBI recovered 95 crucial documents related to import bills, they said.

BSE extends window to submit Aadhaar for new mutual fund investors

NEW DELHI, Feb 15: To ensure compliance with anti-money laundering rules, leading stock exchange BSE today extended the deadline for new mutual fund investors to submit PAN and Aadhaar till April 1, 2018, failing which their folios would be closed.

"The effective date for mandatory submission of PAN and Aadhaar number with requisite documents at the time of opening new folio or account, will now be April 1, 2018 instead of February 15, 2018.

"Accordingly, no new folio account will be opened without the said documents effective April 1, 2018," BSE said in a statement.

For new mutual fund accounts opened from February 15, investors were required to submit PAN and Aadhaar at the time of opening of such folios.

Folios are numbers designated to individual investor accounts, though one investor can have multiple accounts.

In case of the existing mutual fund (MF) folios and for accounts opened thereafter up to February 14, investors need to submit such information by March-end this year. BSE runs mutual fund distribution platform BSE StAR MF.

The move follows the government's amendment of the Prevention of Money Laundering (Maintenance of Records) Rules with regard to collection of Aadhaar from clients, in June.

In October, the exchange had asked its brokers to submit details about preparedness for furnishing Aadhaar details of their clients by month-end in order to ensure compliance with anti-money laundering rules.

In compliance with the PML norms, banks have already sought Aadhaar details from customers.

Trump slams India over Harley-Davidson import tariffs, threatens ‘reciprocal tax’

WASHINGTON, Feb 14: President Donald Trump on Tuesday cited once again tariff imposed by India on Harley-Davidson motorcycles as an example of “unfair” trade practice that the United States must fight back with “reciprocal taxes”. America doesn’t have a levy on Indian motorcycle imports.

Trump held Indian tariff on Harley-Davidson as prohibitively high that severely disadvantaged it against the competition. He first mentioned it in his inaugural address to a joint sitting of US congress in February 2017 a few weeks after taking office. But he had not named India then.

He has since been less coy.

Talking to US lawmakers about trade at the White House, the President said, “We pay a tremendous tax to get into their countries — motorcycles, Harley Davidson — it goes into a certain country. I won’t mention the fact that it happens to be India, in this case.” So, there.

Trump went on to talk about a certain “great gentleman” -- he did not name or describe him -- who had called him and said, in the President’s retelling of the phone call, “ ‘We have just reduced the tariff on motorcycles, reduced it down to 50% — 5-0 — from 75, and even 100%’.”

New Delhi has cut customs duty on high-end imported motorcycles to 50%.

Trump said while Harley-Davidson paid the tax, Indian bike importers paid nothing. “And yet they (Indian companies) sell thousands and thousands of motorcycles, which a lot of people don’t know, from India into the United States. You know what our tax is? Nothing.”

Harley-Davidson India has an annual sale of 3,700, according to reports, but Trump’s claims that Indian motorcycles sell by the “thousands and thousands” in the US was called an “exaggeration perhaps” by India-US trade watchers. The US is not among major importers of Indian bikes.

India did indeed have a 100% tariff on motorcycles larger than 800cc but the rates have since dropped to 75% and 50% for certain categories of big bikes. There is 0% duty on large Indian bikes coming into the United States and that for Trump is a case of “unfair” trade.

The White House conversation between the President and lawmakers was dominated, however, by talk of unfair trade practices by China and other countries, which included close allies such as South Korea and Japan in Asia and Canada across the border in North America.

Trump has also complained about countries that have a trade surplus with America, with China in the lead, by a wide margin, and India lower below.

He has ordered an investigation of these relations for unfair trade practices and already announced certain actions.

He has been speaking forcefully of reciprocal taxes. The Harley-Davidson case, he said, seemed like one. “So I say we should have reciprocal taxes for a case like that. I’m not blaming India. I think it’s great that they can get away with it. I don’t know why people allowed them to get away with it.”

“But there’s an example that’s very unfair. And I think we should have a reciprocal tax,” he said.

GST e-way bill implementation deferred due to glitches

NEW DELHI, Feb 1: The government on Thursday deferred implementation of requirement to carry e-permits for inter-state transportation of goods following technical glitches.

GST provision requiring transporters to carry an electronic waybill or e-way bill when moving goods between states was to be implemented from Thursday to check rampant tax evasion.

“In view of difficulties faced by the trade in generating e-way bill due to initial technological glitches, it has been decided to extend the trial phase for generation of e-way bill, both for inter and intra-state movement of goods. It will be applicable from a date to be notified,” the Central Board of Excise and Customs (CBEC) tweeted.

After implementation of the Goods and Services Tax (GST) from July 1, the requirement of carrying e-way bill was postponed pending IT network readiness.

GST Network, the company developing the I-T backbone for the new indirect tax regime, had been conducting trial runs for the e-way bill system since January 17, during which a whopping 2.84 lakh such permits were issued on the portal.

However, with the formal launch of the e-way bill Thursday, the system witnessed technical glitches.

Sources said the along with inter-state e-way bill generation by all states, 17 states also started generating such permits for intra-state movement of goods, which created pressure on the portal.

Central Board of Excise and Customs (CBEC) chairperson Vanaja Sarna held a review meeting to discuss on streamlining the system.

The all-powerful GST Council had on December 16 decided to implement the e-way bill mechanism for intra-state movement of goods from June 1 and from February 1 for inter-state movement.

E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). Movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill.

The e-way bill can also be generated or cancelled through SMS. When an e-way bill is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.

Transporters, who want to generate e-way bill, can visit the ‘ewaybill.nic.in’ portal and register themselves by giving the GSTIN. Transporters, who are not registered under GST, can enrol themselves under e-way bill system by providing their PAN or Aadhaar to generate the e-way bill.

E-way bill will bring uniformity across the states for seamless inter-state movement of goods.

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