Nirav Modi scam: Massive cover-up by banks, media and govt?
What's the story
For seven years, billionaire Nirav Modi and his associates managed to dupe one single bank of a whopping Rs. 11,400cr, and it apparently never found out till now. But a former government-nominated bank director as well as a private businessman had tipped off the media and the government as early as 2013. Still, no one did anything. Was it all a big cover-up?
Bank
When a government-nominated bank director flagged the loans
Dinesh Dubey, appointed Allahabad Bank director in 2012, flagged it in September'13, reports Firstpost. An item for discussion at a board meeting was a request for a Rs. 50cr-loan to Gitanjali Gems, owned by Modi's uncle Mehul Choksi. Dubey objected, saying Gitanjali should first return Rs. 1,500cr already loaned. But he later discovered the minutes of the meeting noted the loan had been approved.
Pressure
Instead of action, pressure on him to quit
This happened at least four times, Dubey said, and everytime he dissented. The management brought these loans to board meetings only so they could evade any action, he alleged. During this time, Dubey also wrote to the RBI and Finance Ministry, warning them and seeking action. But instead, the board as well as different government quarters started pressurizing him. He finally resigned in February'14.
Businessman
A year later, a Bengaluru businessman detected the irregularities
In 2015-16, Bengaluru-based businessman Hari Prasad wrote to the ED, CBI, SEBI, Corporate Affairs Ministry and eventually the PMO, not about a potential scam, but alleging Choksi had already siphoned off at least Rs. 9,872cr. He detected the discrepancies in their balance sheets after he himself was cheated of Rs. 10cr by Gitanjali, reports TNM. About 50 people were duped similarly, he claimed.
Agencies
He approached CID, ED, CBI, RoC, but none took action
In 2011-12, Gitanjali invited franchisee investors promising huge returns. Prasad invested Rs. 10cr and opened a store. He was to get Rs. 15-16L monthly, but Gitanjali defaulted on all payments. He shut shop in 2013-14, then approached police, CID, ED and CBI. None took action, or claimed there was no criminality. He finally wrote to PMO, which forwarded it to Registrar of Companies (RoC).
Media
Even media didn't cover his allegations despite being informed
In July'16, the RoC told him his grievance had been "disposed of," but no action was taken. By then, Prasad had written to TV18 and other news agencies. Some like TV9 Kannada and TV9 Gujarat interviewed him as well as other victims, but the pieces were never published. A massive cover-up might be unlikely, but with such allegations, it can't be ruled out.