27 May 2020
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The Curious Case of Nirav Modi: What Went Wrong?
The Indian diamond industry has always been under the magnifying glass. So many cases have come and gone, but there is something extremely disheartening about Nirav Modi’s case that has come to light recently. He was the shining star of the diamond industry, a celebrity jeweller, who has now been alleged of amassing Rs 11,000 crore. Something like this makes you wonder if this was just a foundation of something bigger, a larger heist perhaps? And his uncle, Mehul Choksi, Chairman, Gitanjali Gems has also been accused of duping distributors, franchise owners and bankers in the past. It is hard to not connect the dots between the two. Not to mention Neeshal Modi, Nirav’s brother is married to Isheta Salgaocar, the daughter of Dipti Salgaocar, Mukesh & Anil Ambani’s only sister. How two employees managed to deceive a public sector bank like PNB on behalf of one of India’s most famed jeweller is not just ludicrous but also a classic example of misappropriation of power and lack of due diligence.
By: Diamond World News Service
Feb 16 2018 11:38AM
Reference: 16094  


Hailed as the ‘shining star’ of the Indian gems & jewellery industry, this well-known jewellery designer and his company have been named in two complaints for fraudulent transactions worth Rs 10,000 crore.

Often described as the ‘Diamond king of India’, Nirav Modi, his eponymous jewellery label has been omnipresent over the last decade.  Be it the robust expansion plans, advertisements, lavish jewellery showcases, the man knew how to be talk of the town. He is still talk of the town, but not for the laurels of him and his brand. The Central Bureau of Investigation (CBI) received two complaints from Punjab National Bank (PNB) against Nirav Modi, alleging fraudulent transactions to the tune of Rs. 11,292 crore.

According to various news reports, in 2017, Nirav Modi was ranked 84 on the Forbes Richest List. Forbes magazine described him as the founder of the $2.3 billion (in revenues) of Firestar Diamond. His current net worth is reportedly $1.73 billion.

It is quite surprising to know that one of the richest men is at the centre of a billion dollar scam. The company was planning to raise between Rs. 750 crore and Rs. 1,000 crore through a maiden public offering of his company Firestar Diamond Ltd, as reported by ET in 2016. By 2025, the brand targeted to open 100 stores globally and have a presence in the key cities of the world, states the brand’s Linkedin profile. He has launched 16 stores in diverse locations such as Delhi, Mumbai, New York, Hong Kong, London and Macau, according to Forbes magazine. Many of these stores are located in plush, high-street localities where monthly rentals are skyrocketing. Rents at some Hong Kong shopping centres have climbed to as high as HK$1,000 (US$128) per square foot as reported in 2017. Price of his jewellery pieces range from Rs. 5 lakh to a whopping 50 crore.

Was it an ambition or a well-though out plan?

Nirav Modi had charted out his business plan well and has been implementing it cautiously to take his brand to newer heights year-after-year. However, if one looks at the recent events, one wonders if the Nirav Modi flying out of the country (Government sources told ANI that Nirav Modi left India on 1 January )was strategically planned and is a part of a well-thought out plan. His brother and wife, too, have reportedly left the country.

 Nirav Modi had high expectations from his brand, which he marketed as a global brand coming from India. He wanted his brand to be counted in the leagues of Cartier and Tiffany. He aimed to make his brand to be Asia’s first luxury brand. His ambition took him from being a diamond trader to a sought after jewellery designer. If we look at some of his business decisions like acquiring Frederick Goldman in 2005, which gave him direct access to outlets like JC Penny, Sears and even a Walmart, Nirav Modi comes across as a person with sharp business acumen, who understood the pulse of business well. During the times of the recession when a number of diamond business were suffering, Nirav Modi saw it as an opportunity and bought a lot of diamonds at cheap prices. At a time when rupee was dropping, he decided to use diamonds to launch a jewellery line.

He was also the first Indian jeweller to get featured on the cover of Christie’s catalogue. However, when his Golconda Necklace sold for $3.5 million, he became a star jewellery designer overnight. His brand was then being referred as the next big brand coming from India.

One wonders was it greed or a well-thought out plan? If we looked at his journey as a diamond trader and a jewellery designer, it’s evident that he has been a daring businessman who believed in thinking out of the box and taking risks. But does it mean that one can risk the reputation of banks (here, the PNB) to materialize one’s over-the-top dreams? It also raises question on the lack of due of diligence on the part of the bank, which was crucial in such cases. Does it mean the more powerful and rich you are, the more leeway you get in this country?


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