Nirav Modi and his uncle Mehul Choksi, are the main accused in the PNB scam of almost USD 2 billion and they both left India before the details of the fraud came to light in January 2018. Choksi acquired an Antiguan passport by way of investments in the country and is currently a resident there. However news has emerged that Antigua is trying to cancel Mehul Choksi's passport, which allows him a visa free entry to 150 countries, including UK for upto 6 months. Antigua and Barbuda is one of the Commonwealth countries- a unique political association of 53 member states, nearly all of them former territories of the British Empire.
How did Mehul Choksi acquire an Antiguan passport?
A small group of countries is creating a vast 'identity management' industry. Thirteen countries such as Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, Cyprus, Malta, Moldova, Montenegro, Vanuatu, Austria, Jordan and Turkey, now treat passports as a new global asset class, 'selling them legally on the open market' like government bonds, writes a Sunday magazine by a UK daily.
Buyers include wealthy people who come from countries, who do not enjoy visa free access to leading economies. Unfortunately human rights violaters, money launderers or other fugitive to justice with access to ample money allegedly buy their way into such countries too. Critics say that selling passports is encouraging terrorism. But there are also countries where with threats to hefty personal and corporation tax rise, people are moving away from them to 'havens' where they have some 'extra' monetary benefits.
For the process which is based on mainly investments, applicants usually use an agent, approved and licensed by Antiguan government, The Sunday Times wrote. They are then investigated by the agent and the Antiguan government, who use external agencies including interpol to verify informations.
Once approved, successful applicants get their passport only once they have handed over a substantial sum to the government. For example, in Antigua, you could either make a one-time contribution of $100,000 to the treasury, spending $400,000 – or $200,000 each if a couple applies before October- on an Antiguan property that they can use for five years and then sell if they want to, or investing $1.5mn in a local business or $5mn as part of a consortium with other investors, with each investor paying a minimum of $400,000. Non-refundable fees are about $35,000, and the process typically takes about 6 months. Successful applicants do not have to live or spend more than a year in Antigua during the first five years.
More than $400mn has been invested in Antigua like this, ie about 5% of the country's GDP and 20% of all foreign investments. This cash has also helped the country to pay off its entire external debt to the IMF- which was about $117mn. New investments has helped the economy grow at about 5% per annum, boosting employment by almost a quarter, since 2013.
Nobody usually disputes this citizenship programmes in such cash strapped countries. However the secrecy around this citizenship trade is making things dangerous.
Charmaine Quinland-Donovan, who heads citizenship scheme in Antigua reportedly admitted that her departmemt has made some mistakes- but did not divulge any further details. However John Arlidge, investigating from The Sunday Times later found out the Antiguan government is trying to cancel passports of three successful applicants, two Chinese and one Indian- which is Mehul Choksi- currently a resident of Antigua. He allegedly lied to the Antiguan authorities on the application form, claiming he was not subject to any forthcoming criminal investigation in any jurisdiction. Choksi can therefore be convicted of sedition or treason against Antigua and Barbuda. However, in a letter through his attorney, Choksi reportedly said, "During the course of my application I did all that was lawfully required of me to do. My application for citizenship was in due course approved." If his passport is cancelled, whether Choksi will be forced return to India, remains a question.
Currently Choksi has presented 37 medical reports on record and said that that he cannot go back to India due to bad health. He filed the application in special Prevention of Money Laundering Act (PMLA) court in Mumbai through his counsel and reportedly claimed that he did not escape abroad after the PNB scam as the FIR was filed after he was already abroad.
Nirav Modi to appear before a judge
Nirav Modi will appear in Westminster Magistrates' Court on Friday 29th March, where it is believed that his legal representatives would explore or revisit his bail options, initially rejected by Judge Marie Mallon on Wednesday 20 March 2019. This hearing is otherwise a case management hearing where Judge Emma is meant to make a details of the forthcoming extradition hearing and its technicalities.
Nirav Modi's arrest; bail denied
Modi, dressed in a plain white shirt and trousers, appeared in the dock where he spoke only to confirm his name and also to formally decline consent to be extradited to India.
District Judge Marie Mallon, presiding over the hearing on 20th, said that she was not inclined to accept Modi’s bail plea due the “high value amount” attached to the allegations against him and that he would have “every incentive” to evade surrendering before the court.
“There are substantial grounds to believe that you would fail to surrender before the court if bail were to be granted,” the judge noted.
The Crown Prosecution Service (CPS), representing the Indian authorities in court, told the court that the 48-year-old was wanted in India for fraud and money laundering amounting to almost USD 2bn. Under UK domestic law, the CPS said he is liable on charges of conspiracy to fraud, which has a maximum jail term of seven years, and conspiracy to conceal, which could result in anywhere between seven, 10 and life term in jail.
“We do object to bail because there are substantial grounds to believe the requested person (Modi) would fail to surrender,” said Barrister Jonathan Swain, appearing for the CPS and on behalf of the Indian government. Modi’s legal team was headed by Barrister George Hepburne-Scott and his solicitor, Anand Doobay of Boutique Law, is the same legal expert hired by former Kingfisher Airlines boss Vijay Mallya in his extradition proceedings against India in the UK courts.
Modi’s team made their case for bail, offering £500,000 as security and an offer to adhere to “stringent” conditions.
“He strongly contests all the allegations and is prepared with comprehensive arguments to support his case... his legal team has had months contact with the extradition squad and expressed his willingness to cooperate,”Hepburne-Scott said.
It emerged in court that Modi was arrested from a Metro Bank branch in London by uniformed officers on Tuesday 19 March afternoon, when he went there to open a new bank account. A bank clerk alerted Scotland Yard as a result of the “high publicity” surrounding the case and Metropolitan Police officers arrived to execute the arrest. This over-rode a previous arrangement made between Scotland Yard’s extradition unit and Modi’s lawyers for him to surrender “by appointment” at a central London police station on Monday, something his legal team blamed on the “nature of publicity” surrounding the case.
The court told that Modi arrived in London in January 2018, before any of the allegations emerged and has maintained a very “visible” presence in the country and offered to cooperate with the UK authorities since his arrival. He is currently employed by Diamond Holdings Ltd in London for a monthly salary of £20,000 and pays his council tax regularly, his lawyers stressed in support of his defence.
In possesion of three Indian passports
It also emerged in court that Modi was in possession of at least three passports, all since revoked by India. The passports, since revoked by the Indian authorities, include one now in possession of the Metropolitan Police, a second expired passport lying with the UK Home Office and a third with the UK’s Driving and Vehicle Licensing Authority (DVLA). Besides the passports, the court was told that Modi possessed multiple residency cards, some of them expired, but covering countries such as the UAE, Singapore and Hong Kong.
Frances Hallworth-Noble who runs The London Concierge Company is a shopping planner for billionaires, also engaged as the personal assistant of Nirav Modi, according to The Daily Telegraph. She was reportedly present at the hearing and is meant to hand over the Indian passport with DVLA to Met Police, moment it came back. Modi was allegedly applying for a provisional drivers license against this passport, and submitted it to DVLA.
The Crown Prosecution Service (CPS), arguing the case for his extradition to face the Indian justice system on behalf of the Indian government, had strongly opposed bail because Modi had “deliberately evaded justice” and not returned to India despite a series of criminal summons issued by Indian courts.
Held at Wandsworth prison
He has been kept in the holding cell at HMP Wandsworth prison. Modi, who was living in a plush apartment in Centre Point in the West End until his arrest on Tuesday, was sent to prison on the eve of Holi. HMP Wandsworth is a Category B prison, where criminals are held if not deemed to be of a high level of security risk, the PTI reported.
It can currently hold 1,628 prisoners and was originally built in 1851.
Since 1989, there has been extensive refurbishment and modernisation of the wings, including in-cell sanitation, privacy screens for cells occupied by more than one prisoner and the more recent installation of in-cell electricity, the UK Justice Department notes in reference to the prison.
Modi is likely to be in a separate cell until his next hearing on March 29, 10am.
