Billionaire diamantaire Nirav Modi has written to the Punjab and National Bank (PNB) management, media quoted Press Trust of India that claimed it had a copy of the letter. Nirav Modi, who has allegedly defrauded Punjab National Bank to the tune of Rs 11,500 crore along with his uncle and Gitanjali Gems owner Mehul Choksi, wrote two emails to the bank on 13 and 15 February. Nirav Modi has charged PNB with overzealousness that has affected his reputation and ability to repay the dues.
Here are the eight takeaways from Nirav Modi’s letter:
1. The Billionaire diamantaire is disputing the claim in the media by PNB that his group owes Rs 11,000 crore. The liability of the group is “substantially less”, he said. This damaged his brand and limited chances of paying back his dues.
2. Nirav Modi told the bank soon after it filed a complaint with the Central Bureau of Investigation (CBI) that the bank either sell on its own or allow him to sell the Firestar Group of its assets.
3. The Firestar Group business was valued at Rs 6,500 crore and its sale could have helped either reduce or discharge his debt.
4. A wrong picture on the group in the media followed by search and seizure operations have resulted in Firestar International Private Limited (FIPL) and Firestar Diamond International Private Limited (FDIPL) ceasing operations. This has affected the group’s ability to pay back the dues. He said both firms enjoyed a higher credit rating and had never defaulted on their payments.
5. His group could have settled its dues from the Rs 5,649 crore assets seized by the authorities. But panic has gripped the market and the stage to sell the assets and settling the dues has passed.
6. Nirav Modi alleged that the authorities have wrongly named his brother in their complaint. His brother was not connected with any of the three groups owned by the billionaire diamantaire. His wife, who has also been named in the complaint, was never connected with any of his business operations.
7. His uncle Mehul Choksi has been wrongly named in the complaint, Nirav Modi charged, adding that Choksi has an independent and unconnected business.
8. Finally, he asked PNB to support his efforts to pay back the dues.
Below is the copy of Nirav Modi’s letter to PNB
1. I refer to the extended discussions between us, and between my representatives and your officers. I also refer to my emails dated 13th and 15th February 2018.
2. In view of the recent actions by you, the authorities, and the extensive press coverage in the last couple of days, I must state my position to the extent it is relevant at this stage. The media suggests that the liability of the Nirav Modi Group is over Rs. 11,000 crores. As you are aware, this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. 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 moneys that may be found due not just from Firestar Group, but also from the three firms. The valuation of the business was approximately Rs. 6,500 crores which could have helped reduce/discharge the debt to the banking system.
3. However, the erroneous liability resulted in a media frenzy led to immediate search and seizure of operations, which has in turn resulted in Firestar International Private Limited and Firestar Diamond International Private Limited effectively ceasing to be going concerns. This has thereby jeopardized our ability to discharge the dues of the group to the banks.
4. In light of this, it is necessary to reinstate some facts:
I. You have acknowledged that:
(a) The Buyers Credit Facility has been extended by PNB to the three partnership firms since several years.
(b) There has been no default on the part of any of these firms over all these years.
(c) Moneys have gone through PNB over all these years for the repayments of the advances given by the overseas branches of banks under the Buyers Credit.
(d) FIPL and FDIPL have been profitable, enjoyed a high (A-) credit rating, and have never been in default to any bank, and its bankers are fully secured.
II. You are aware that:
(a) PNB has over the years been earning bank charges to the tune of crores of rupees on the Buyers Credit Facility extended by PNB to the three partnership firms.
(b) The banks that have extended the money to the firms buyers have been receiving payment in full, with interest, in time all these year.
5. Yesterday, FIPL and FDIPLs inventory has been seized by the authorities. As per press reports the valuation of the is Rs. 5,649 crores. These, and other assets of FIPL/FDIPL and the three firms (including receivables and assets seized) could have settled all the amounts due to banks. However, now that stage appears to have passed, and there is generally panic.
6. I urge you once again to be fair, and in the interests of transparency, justice, the banking system and India as a whole, support my efforts to make good all the amounts that are found due by my group to all banks.
7. In your complaint you have wrongly named my brother, who was not at all concerned with the operations of the three firms or FIPL (India) and FDIPL (India). My wife was not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named in this complaint since he has an independent and unconnected business from mine and none of us are aware or concerned with his dealings with your officers.
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