Fraud

India’s Biggest Fraud Case and Hong Kong

In Banks, Jewellery, News by Parvesh ShamdasaniLeave a Comment

A reported by The Strait Times back in February informed us of the largest case of fraud in India at the state-run Punjab National Bank (PNB), the country’s second largest lender with US$120 billion in assets. The amount involved was first thought to be US$1.77 billion but according to The Economic Times another fraud case was “unearthed”, with Reuters now putting the alleged figure closer to US$2 billion, and according to them more heads could roll as the investigation continues.

So what does this have to do with Hong Kong? The Economic Times claims that Nirav Modi, the “fugitive” diamantaire at the heart of the initial US$1.77 billion fraud allegation fled to Hong Kong in February, then stayed in London for a month before jetting off to New York. What was he doing in Hong Kong? Lets put it this way, he was not here for the Symphony of Lights or the Chinese New Year festival. He apparently first went to the UAE where the Indian agencies chased him, then he left for Hong Kong on February 2nd where he attempted to make arrangements for a longer stay but failed, then he headed for London mid-February. The alleged purpose of his visit here (besides our egg tarts) was to use his three companies Sunshine Gems Limited, Sino Traders Limited, and Auragem Company Limited to launder the illegal proceeds he fraudulently stole from the Indian banks.

Why am I not surprised that Hong Kong was used as a conduit to launder illegal proceeds? The jewellery and precious metal/stones industry in Hong Kong currently has guidelines which do not need to be followed, making the industry easier to exploit. There will come a point in time where after much abuse the system will come under scrutiny, and with FATF’s impeding arrival at the end of the year, that time might be closer than we think.

Business and compliance enthusiast, problem solver, road warrior, police ID check magnet, and half geek whose exploits have taken him around the United States, United Kingdom, Caribbean, India, deep into Southeast Asia and West Africa. Entered the anti-money laundering and high risk field to help develop understanding, contribute research, improve standards, prevent profiteering at the expensive of SMEs, and to protect interests of the average person.
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