In the latest case, a UK court has given a long-awaited ruling against the fugitive diamond businessman Nirav Modi which makes him owe over ₹100 crore and will also put him on the hook for the Bank of India. Modi is personally liable for a loan guarantee for his Dubai-based company Firestar Diamond FZE, and so in this regard his legal troubles only get worse.
The case dates back to July 2012 when the Bank of India extended a loan to Firestar Diamond FZE. In August 2013, Nirav Modi signed a personal guarantee on which he was to be responsible for repayment if the company defaulted. In 2018, after the huge PNB fraud case, the finances of Firestar collapsed, and the bank was looking for repayment.
Judge Simon Tinkler of the London Circuit Commercial Court has ruled that Modi is liable for a principal amount of USD 4.1 million (₹38.9 crore). With accrued interest, his total liability now stands at USD 10.7 million (₹100 crore). Modi’s arguments were that the guarantee was unenforceable and that he had not received valid demand notices. Evidence presented included an email from Modi himself in February 2018 that he had admitted investigations and bad publicity had destroyed his businesses.
Modi's legal troubles are mounting. He has been held in UK custody since March 2019 and is fighting extradition to India, where he is wanted in the case of PNB frauds worth over USD 2 billion. The Indian government has frequently stressed that the fugitive offenders like Modi and Vijay Mallya collectively owe public sector banks ₹58,000 crore— a measure of the magnitude of financial harm done to them.
For India, the UK court’s decision will strengthen the case against Modi and will work to recover the money that is owed to economic offenders abroad. It also shows the growing global cooperation in holding foreign fugitives to account for financial crimes.
The UK court’s decision to require Nirav Modi to pay more than ₹100 crore to the Bank of India is a landmark step in the long-fought PNB fraud case that is making it possible for Modi to be punished so far in the aftermath of his extradition case to be made public and will strengthen India’s fight to bring Modi to justice for high-profile financial fugitives.
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