Bloomberg Businessweek


Hollywood stars wore his diamonds to the Oscars. Then he was accused of stealing billions from an Indian bank

Nirav Modi didn’t seem like the kind of person who needed to rob $2 billion from a bank. He’s a short man, 47 years old and losing hair, the pocket square in his jacket always arranged to fussy perfection. His daintiness befitted a jeweler to the stars. Kate Winslet wore a Modi bracelet and Modi earrings to the Oscars. Dakota Johnson wore a similar set to the Golden Globes. Priyanka Chopra gazed out of Modi advertisements. Naomi Watts attended the opening, in 2015, of his emporium on Madison Avenue. Christie’s once put his Golconda Lotus necklace on the cover of its catalog and auctioned it for more than $3 million. His stores—in Las Vegas, Macau, Singapore, Beijing, London—were boutiques of bling, where white light bounced off the arrayed gold and diamonds. He told people he wanted 100 shops by 2025. Last year, Forbes estimated his worth at $1.8 billion. A good casting director would have marked him for the role of heistee, not heister.

Even the alleged crime, when it finally broke water in February, appeared to swim against the current of Modi’s glamorous life. The money had been taken from Punjab National Bank in 1,213 grinding doses over seven years. It was the biggest bank fraud in India’s history, and it came robed in technical jargon: letters of undertaking and Swift bypasses, margin money and “nostro” accounts, core banking solutions and buyer’s credit facilities.

But these were just details. In conception, the scheme investigators described was classical, old-fashioned; it relied on inside men, and probably on greasing palms, and certainly on dodging technology more than using it. And it depended on the failure of the notoriously creaky structures of governance for India’s 21 state-run banks. These behemoths, which account for two-thirds of the country’s banking assets, are unwieldy and inefficient, vulnerable to heavy hints from corrupt politicians. Their books crawl with nonperforming loans, on which borrowers have stopped paying the interest or principal: $108 billion as of last September. This compelled the government, in October, to announce that it would stuff the banks with $31 billion in fresh capital over the next two years.

Against this backdrop, the con allegedly orchestrated by Modi and an uncle, Mehul Choksi,

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