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Nirav Modi (centre) has officially been charged after being linked to a billionaire bank fraud. Image courtesy: Sky News
Nirav Modi (centre) has officially been charged after being linked to a billionaire bank fraud. Image courtesy: Sky News

Indian jeweller linked to bank fraud scheme charged

Indian police have officially charged Nirav Modi, the billionaire Indian jeweller who has been under investigation for his involvement in a massive bank fraud.

According to reports, charges were laid against Modi in May after India’s federal police arrested several employees from his company months earlier. It is understood at the time of print 19 people have been arrested for “enabling the defrauding of the bank with forged documents.”

As previously reported by Jeweller, Modi was alleged to have obtained fraudulent loans from Punjab National Bank to the value of at least US$1.8b (AU$2.4b).

It is alleged that between 2011 and 2017, Modi and his uncle Mehul Choksi – managing director of jewellery company Gitanjali Gems – conspired with bank officials at India’s second largest government-run bank, Punjab National Bank (PNB) to fraudulently obtain the loans.

Both men’s whereabouts are currently unknown, despite Choksi previously claiming his innocence in an open letter to his employees.

In related news, the Indian Gem and Jewellery Export Promotion Council (GJEPC) have released a paper on how the industry can reduce risks with banks.

The paper was unveiled at a one-day seminar titled Diamond and Jewellery Financing 2018: Mitigating risks effectively. According to a GJEPC statement, the event aimed to discuss ways to “reduce risks and infuse confidence into financiers.”

“I am happy that such a paper on diamond and jewellery financing has been brought by the council,” minister for Commerce, Industry and Civil Aviation Suresh Prabhu said.

“I hope the active participation of banks and other stakeholders will help in strategising for the development of the gems and jewellery industry. We will never encourage wrong doers in the industry but will ask our financial system to support all genuine players in the gems and jewellery sector,” he added.

Commerce secretary Rita Teaotia echoed similar sentiments, noting the initiative would help “improve confidence and boost lending to the sector”.

“It is important for the banking sector to support the gems and jewellery industry as it forms an integral part of the country’s GDP [gross domestic product],” Teaotia said.

The GJEPC was established in 1966 and aims to introduce Indian gemstone and jewellery products to the international market.

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