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Nirav Modi vanishes amid accusations of massive bank fraud

by Reuters /  / Updated 
Image: Karlie Kloss
Model Karlie Kloss wore Nirav Modi jewelry to last year's Oscars.Richard Shotwell / Richard Shotwell/Invision/AP file

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MUMBAI, India — Nirav Modi's diamonds have sparkled on the necklines and dangled from the earlobes of celebrities including Kate Winslet and Dakota Johnson on Hollywood red carpets.

But India's federal investigative agency last week announced it was looking for Modi as law enforcement officials fanned out to raid his jewelry stores and other businesses in Mumbai and New Delhi.

Central Bureau of Investigation officials told reporters the agency had on Feb. 4 issued a lookout circular in the country for Modi, who they say had left India four weeks earlier.

Punjab National Bank, India's second-largest state-run lender, last month filed a criminal complaint with the CBI that accused Modi and others of defrauding the bank and causing it a loss of 2.8 billion rupees ($43.8 million).

Image: Nirav Modi
Nirav Modi attends a gala in Paris in September.Stephane Cardinale / Corbis via Getty Images file

Then on Thursday, the same bank publicly alleged that Modi was involved with a much larger fraud case: $1.77 billion from a single branch stretching back to 2011.

Modi has not yet responded to the allegations and could not be reached for comment. His flagship company, Firestar Diamond, has said it had no involvement in the case. A lawyer for Modi has denied any wrongdoing by his client.

Modi has a net worth of some $1.8 billion, according to Forbes magazine rankings.

Modi grew up in Antwerp, Belgium, in a diamond-dealing family. At the age of 19, he moved to Mumbai in 1990, he told Reuters in a November interview.

Nine years later, Modi started his own company, Firestar Diamond Ltd., selling loose stones. He employed fewer than a dozen people at the time — by last year the number was more than 2,000.

He said he came to realize the margins were better in retail.

Firestar Group, the parent company Modi controls as a majority shareholder, saw its revenue grow over three years from 103 billion rupees (about $1.6 billion at current rates) to some 147 billion rupees ($2.3 billion) by the 2016-17 fiscal year, according to figures previously provided by the company.

In 2010, Modi launched an eponymous jewelry business branded NIRAV MODI, in capitals. New boutiques in Las Vegas and Hawaii have since been added to a stable that stretches from New York to London to Beijing.

Last week, authorities said they had seized a Rolls-Royce Ghost, a Porsche Panamera and some half a dozen more luxury vehicles belonging to Modi and his firms.

On Saturday, India's Enforcement Directorate, which fights financial crimes, said on Twitter it had taken possession of 21 other properties belonging to Modi worth 5.24 billion rupees ($81 million).

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