India suspends Nirav Modi’s passport but he may have Belgian papers

The external affairs ministry has suspended Nirav Modi and his uncle Mehul Choksi’s passports for 4 weeks. Both Modi and Choksi have been named by PNBBSE -2.10 % in a complaint that they have filed with Central Bureau of Investigation regarding the Rs 11,300 crore fraud they committed in connivance with a few junior bank employees.

But Modi, according to reports, may have citizenship or permanent resident status of some other country as well.

Modi, his wife Ami, brother Nishal and uncle and business partner Mehul Choksi all left the country in the first week of January. Modi was last seen in Switzerland at the World Economic Forum’s annual meet in Davos (January 23-26). Ami is said to be an American citizen, while Nishal is a Belgian national.

With his operations spread across the world, Modi is said to spend a lot of time in the US. Some associates in the diamond trade claim to have seen him use a Belgian passport while travelling.

They added that Modi used to frequently visit India, but had cut down on his visits in the last two years. “He often said there was little time to fly down to India. But he was quick to add that he was just a phone call away for friends who were never separated by distance,” an associate told ET.

The ministry has given the two one week to respond why their passports should not be revoked. “If they fail to respond within the stipulated time it will be assumed that they have no response to offer and the MEA will go ahead with the revocation,” the ministry said in a statement.

Announcing the suspension, the MEA statement said,”On the advice of the Enforcement Directorate, the passport issuing authority in the MEA has today suspended the validity of passports of Nirav Deepak Modi and Mehul Chinubhai Choksi with immediate effect for a period of four weeks u/s 10(A) of the Passports Act 1967.”

They have been asked to respond within one week why their passports should not be impounded or revoked under Section 10 (3) (c) of the Passports Act 1967, it said.

Born into a family of diamond merchants where the empire spread across continents, Modi is caught in the biggest corporate scandal in the country. But to soothe the frayed nerves of bankers, he had written promising to repay all the money he owed.

But banks are firm and suspect that the promise may not be met. The passport suspension could be the first step from the banks keen on saving whatever they can. They have decided to recall all loans given to companies related to Modi and Choksi of Geetanjali Gems.

Nirav Modi is the brand on which his entire business edifice was built with brand ambassadors ranging from Bollywood star Priyanka Chopra to Andrea Diaconu and retail stores from London to gamblers paradise Macau. Given the scandal, it is not clear how many celebrities would continue to associate and promote the brand, or even consumers who were drawn to the products would step into those outlets again.

That essentially could pull down the sales, profits and ultimately the value of the firm. It may be valued far less than the Rs 6,000 crore that he has indicated.