Around 16 companies in Hong Kong and the United Arab Emirates (UAE), allegedly connected to fugitive diamond jeweller Nirav Modi, have filed for winding up of business in the last three months. Sources said the firms were the top buyers and suppliers of Nirav Modi Group of companies and were allegedly controlled by Modi through “dummy directors”.
Documents reveal two such firms in Hong Kong- Auragem Company Ltd and Sino Traders, that filed for a shut down on May 25 and July 4, respectively, had received £592.1 million of the fraudulent letters of undertaking (LoUs) issued by state-owned Punjab National Bank (PNB). Other firms allegedly floated by Modi in Hong Kong, that are winding up include Brilliant Diamonds Ltd (June 4), Eternal Diamonds Corporation Ltd (June 6), Fancy Creations Company Ltd (May 25), and Sunshine Gems Ltd (June 7). All the firms have been wound up under the “creditors' voluntary winding up” process initiated by the company directors.
Also, at least 10 “dummy” companies in the UAE allegedly formed by Modi to rotate the LoU funds “in the guise of export-import transactions” have also filed for liquidation. Several of these firms such as Unique Diamond and Jewellery FZC, Universal Fine Jewelry FZE, Vista Jewelry FZE, Diagems FZC, Pacific Diamond FZE, Tri Color Gems FZE and Hamilton Precious Traders Limited FZCO have received about £700 million through PNB LoUs between 2011 and 2017.
Indian investigative agencies allege that the six Hong Kong-based firms that filed for liquidation have allegedly diverted at least £84 million of LoU funds to Modi's firms Firestar Diamond Inc and A Jaffe Inc in the US, and £27.1 million to Belgium-based Firestar Diamond BVBA. The former two companies filed for bankruptcy protection in the United States on February 26, while the latter declared Bankrupt by an Antwerp court on March 19.
On August 25, an investigation report submitted by John J Carney, an examiner appointed by a US bankruptcy court hearing the plea of Firestar Diamond and A Jaffe, said that the two firms were “directly involved” in transactions related to the alleged £1.35 billion PNB fraud for which Modi has been charged in India.
Having left India in the first week of January, weeks before the major banking scam surfaced, Modi is wanted by multiple investigating agencies in India. The Interpol issued a Red Corner Notice against Modi in July, and earlier this month, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) sent a request for extradition of Modi from the UK.
