Nirav Modi (born 1971) Until early2018, Nirav Deepak Modi was an Indian billionaire businessman, and the founder of Nirav Modi Global Diamond Jewellery House that was established in 2010. He was born in Palanpur, Gujarat, but grew up in Antwerp, Belgium. His family has been in the diamond business for several generations.
His grandfather Keshavlal Modi lived in Chennai and in Singapore. When Nirav was 19, he and his father Deepak Modi moved to Mumbai to work in his uncle’s business. His uncle, Mehul Choksi, headed Gitanjali Group, a retail jewelry company with 4,000 stores in India.
Before dropping out, Nirav studied at the Wharton School at the University of Pennsylvania. While there, he met his future wife, Ami, the daughter of a diamond businessman. Nirav’s younger brother Neeshal is married to the niece of Mukesh and Anil Ambani and was also involved in Modi’s Global Diamond Jewellery House
Nirav’s interest in art and design began at an early age when he visited museums in Europe. After moving to India in 1989, and training in all aspects of the diamond trading business, he founded Firestar (formerly known as Firestone), in 1999 as a diamond sourcing and trading company. Firestar has been the exclusive distributor of Rio Tinto’s Argyle pink diamonds in India.
In 2002, Nirav’s company began manufacturing jewelry on a contract basis. It acquired the American companies Frederick Goldman in 2005, and Sandberg & Sikorski and A.Jaffe in 2007.
In 2008, a close friend asked Modi to make a pair of earrings and soon after created his brand. He became well known after he designed his Golconda Lotus Necklace with an old, 12-carat, pear-shaped diamond as its centerpiece in 2010.
The diamond was earlier sold in the 1960s and re-polished. It featured a lattice of white and pink diamonds and was featured on the cover of Christie’s catalogue in Hong Kong and later auctioned for $3.6 million in 2010. Many of Modi’s designs featured the use of pink diamonds. He also developed new diamond cuts: the Ainra Cut, Endless Cut, and the Moghul Cut.
The Golconda Lotus Necklace, featuring a rare 12.29 carat Golconda diamond, pink diamonds and Ainra brand cut diamonds, sold at Christie’s Hong Kong auction in November 2010.
The Riviere of Perfection, featuring 36 flawless white diamonds weighing a total of 88.88 carats, was sold at Sotheby’s Hong Kong auction in 2012.
Nirav Modi was the first Indian luxury brand to have a 1,000 sq. ft. store on the most luxurious address in New York, Madison Avenue. The store launch in 2014 was visited by not yet officially announced presidential candidate Donald Trump, actress Naomi Watts, and model Coca Rocha.
Nirav had previously walked the Red Carpet alongside Kate Winslet at the 2014 Oscars when Winslet wore a Nirav Modi jewel. After the Madison Avenue launch, the designer also set up stores in other luxury locations such as Old Bond Street in London and in Hong Kong and Macau. The plan was to set up stores at various high-end retail locations across the globe.
In 2010, Nirav had started designer diamond stores bearing his name in New Delhi’s Defence Colony followed by one in Mumbai’s Kala Ghoda. These were followed by 17 more stores across the world in prime locations. Modi’s vision was to have 200 stores by 2025. News reports stated that he was planning to sell some of his business to a well-known foreign brand and was also planning to raise funds through an initial public offering (IPO).
In 2013, Nirav was featured on the Forbes list of Indian billionaires and was listed there numerous times since. In 2014, Nirav Modi opened his first flagship store in New Delhi, followed by a store in Mumbai in 2015. Nirav Modi launched globally with boutiques in New York City and Hong Kong also in 2015, followed by two other boutique launches in Hong Kong in 2016. He opened another location at the MGM Macau in 2016. All the stores have now been shut down.
In February 2018, the Indian government’s Central Bureau of Investigation (CBI) launched a probe of Modi. Acting on a complaint from the Punjab National Bank, an Indian banking institution, the CBI was responding to allegations that Modi and his partners defrauded the bank for 280 Crore (approximately $40 million in US dollars) by conspiring with bank officials to fraudulently obtain Letters of Undertaking (known as LoUs) that are provided by one bank to another mainly to allow overseas imports for making payments to overseas suppliers.
The bank alleged that Modi and his business partners were involved in fraudulently issuing the LoUs – or bank guarantees – at the bank’s Mid Corporate Branch in Mumbai’s Brady House.
In March 2018, an article in Forbes reported that, “The scandal broke a week after Modi was photographed at the World Economic Forum in Davos in late January. Since then, [Modi] lost nearly all of his assets. The Indian government … reportedly confiscated his possessions; [and] the U.S. subsidiary of his jewelry company Firestar International filed for bankruptcy in late February in New York City.”
Modi denied the allegations. Forbes later went to the Madison Avenue address and, while Modi’s name was still up outside the store, its displays—still fully lit—were emptied and its blinds were closed.
Because of the bankruptcy filings and the ongoing investigation, Forbes removed Modi from its annual billionaires list.
The Forbes article further stated, “We suspect Firestar International’s “audited” financial statements, made available annually to our journalists by Modi and [that] were used to evaluate his fortune, may not have reflected the truth about the company’s financials.
“Modi and his uncle—who is also his business partner—allegedly colluded with a deputy manager at Punjab National Bank to qualify for hefty loans to support his businesses outside of India, according to the complaint. The manager, who retired in May 2017, fabricated fraudulent letters and bypassed the bank’s official procedures, thus avoiding detection of transactions guaranteeing loans to Modi’s companies without collateral, the bank alleges.
“Although the complaint estimates that Modi and his partner allegedly embezzled $43 million, Reuters and Bloomberg report that using allegedly fraudulent loans, Modi may have injected at least $1.8 billion into his companies.”
In April 2018, The New York Times reported that Modi was on the run. “About a week after Mr. Modi grinned for the cameras with the [Indian] prime minister … Indian officials accuse[d] Mr. Modi, his family and business associates of assembling a global empire with nearly $3 billion in money obtained illegally, mostly from government-run banks.
Finding Mr. Modi became something of an Indian national pastime. Reporters in New York camped outside a luxury hotel, the JW Marriott Essex House, where they believed Mr. Modi was staying. One who rang the bell outside what they believed to be his room found only a servant and a fluffy white dog.
Prior to this, in March 2018, Bloomberg News reported that Modi’s firm Firestar Diamond Inc. had applied for bankruptcy protection at a Manhattan bankruptcy court in order to protect its assets in the United States and their revolving credit facility with Israel Discount Bank.
His properties in India, including jewelry, paintings, and real estate, worth about $100 million were attached by the Enforcement Directorate (ED). The official website of Nirav Modi became inaccessible after the revelation of the allegations.
The ED attached four wind power plants, owned by Modi, in Rajasthan in connection to the alleged fraud. The wind power plants had been operational since 2014-15. In May 2018, the CBI and the ED had each registered to probe the case. Both Nirav Modi and Mehul Choksi were said to have left the country before criminal cases were lodged against them.
With the collapse of his brand, Nirav Modi’s fortune collapsed, too. Forbes removed him from their annual billionaires list. One of Modi’s companies, A. Jaffe, acquired through his Synergies Corporation, was auctioned in May 2018 and purchased by Parag Diamond.
In April 2018, it was alleged that Nirav Modi had found safe haven in Hong Kong. In June 2018, Modi was reported to have arrived in the UK where he applied for asylum with Britain’s Home Office citing he was a victim of “political persecution” and denying any wrongdoing.
In July 2018, The Print, an Indian publication, reported that, “Interpol has listed “money laundering charges,” against Modi. The ED has written to the external affairs ministry seeking its approval to move an application in the relevant UK court to bring back Modi [to India.}
“The move comes after a special CBI court in Mumbai had issued non-bailable warrants against Modi and his uncle Mehul Choksi on April 8, 2018. … Until now, it was believed that Modi, wanted in connection with the scam, was in Hong Kong, where he also runs a showroom. He runs another jewellery showroom in Beijing.”
According to sources, the move was initiated to carry out further investigation in the case filed under the Prevention of Money Laundering Act (PMLA) against Modi and his associates.
The fraud was detected at PNB’s Brady House branch in Mumbai [when it was discovered] that some letters of undertaking (LoUs) and foreign letters of credit (FLCs) were fraudulently issued to some overseas branches of Indian banks by misusing SWIFT, a messaging network that banks use to securely transmit information and instructions through a system of codes.
In its complaint, Punjab National Bank (PNB), had directly accused Modi, his wife Ami, brother Nishal, and uncle Choksi of conniving with two bank official to commit the fraud.
According to CBI investigators, 293 LoUs were issued to Modi and his companies in the past two years. During the investigation, several raids were carried out “… and the ED … has searched more than 251 properties across the country and seized diamond, jewellery, precious and semi-precious stones and gold worth crores of rupees, along with immovable properties belonging to Modi and Choksi.”
Whatever comes of the investigation, it is certain that Modi’s business has come to a standstill. News like this impacts a brand tremendously and many of Modi’s clients and brand ambassadors have backed out of association with him.