Mumbai, India
Oscar nominee Kate Winslet wore a custom-made, sleek black Ralph Lauren gown when she walked the red carpet in 2016. She was nominated for an Academy Award for her performance in “Steve Jobs” – but nearly 8,000 miles away in India, commentators weren’t focused on her dress, nor her nomination.
They were lauding the diamonds cascading from her lobes.
Her delicate earrings were the stunning work of Nirav Modi, an Indian jeweler whose name had become synonymous with rare stones and celebrity glamour well beyond his homeland.
“Kate Winslet sparkled in Indian jewellery designer,” wrote The Times of India, as rival newspapers also praised the look.
It was the peak of Modi’s ascent from obscurity to the wardrobes of the rich and famous. His eponymous brand counted celebrities among its ambassadors, and his designs appeared on red carpets from Los Angeles to Cannes. A third-generation diamantaire, Modi projected the image of a modern-day magnate, and a symbol of a rising India.
His empire stretched across some of the world’s most exclusive retail districts, from Madison Avenue in New York to Bond Street in London and Canton Road in Hong Kong. With roughly a dozen boutiques worldwide and a growing roster of celebrity endorsements, Modi seemed to have the world at his feet.
But behind the camera flashes, a different story was unfolding, one that hadn’t yet appeared in glossy fashion magazines but was taking shape via a web of alleged shadow transactions that ran through one of India’s largest state-owned banks.
In 2018, Modi was accused by Indian authorities of orchestrating one of the country’s largest bank frauds in modern history.
The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) charged him with defrauding Punjab National Bank of roughly $2 billion. Modi, they claimed, had allegedly been bankrolling his empire on borrowed money that he had no intention of repaying.
Modi denies the allegations and previously said he owes the bank far less. For nearly seven years he has fought attempts to extradite him from London, where he was arrested in 2019, to face charges including fraud and money laundering in India. CNN has contacted his lawyer for comment.
Now, India’s Foreign Ministry says his legal options have narrowed to their final stage.
The fight, it seems, may soon be over.
Modi’s story begins in the city of Palanpur, nestled in India’s western Gujarat state and known as the ancestral home of the country’s diamond merchant class. Born in 1971, Modi inherited a multigenerational legacy steeped in the world of gems.
His grandfather, Keshavlal Modi, began trading rough diamonds in the 1930s, navigating the Mumbai-Singapore commercial route and laying the foundations of the family business. But Modi’s childhood was also marked by profound tragedy. At just eight years old, he witnessed his mother’s suicide, an event later cited by his legal team during a UK extradition appeal, to illustrate his struggle with depression.
Modi’s father, Deepak Modi, established his own diamond business in Antwerp, where the Palanpuri Jains, adherents of the Jain faith, helped reshape the industry. Their influence transformed the Belgian city’s trade from its predominantly Jewish roots into a thriving Indian powerhouse.
“Dinner table conversations would often revolve around diamonds and jewellery,” Modi told Millionaireasia magazine in 2015.
Modi often spoke about how he wished to become an orchestra conductor, but instead he enrolled at the Wharton School at the University of Pennsylvania.
He soon left his business studies behind, returning to India in 1989.
“It was a great high for my parents when I got in, and let’s say it was not such a high when I dropped out,” he said in a 2016 interview with CNBC.
At 19, Modi began his professional apprenticeship under his uncle, Mehul Choksi, chairman of the Gitanjali Group, then one of the world’s largest branded jewelry retailers. Headquartered in Mumbai, Gitanjali operated thousands of stores across India.
According to author Pavan Lall, the young entrepreneur quickly became Choksi’s “protégé.”
The Gitanjali Group was a giant in mass market jewelry, retailing gold and diamonds through multiple brands. Modi, however, envisioned something far more exclusive.
He “was driven to focus on ultra-premium and be like Harry Winston or Bulgari, and focus only on diamonds,” Lall, who wrote “Flawed: The Rise and Fall of India’s Diamond Mogul Nirav Modi,” told CNN.
“His rise was in essence driven by a desire to build India’s first super-luxury diamond jewelry brand and have it go international.”
In 1999, he founded Firestar Diamond (initially Firestone), supplying major retailers and global markets – and laying the groundwork for global success.
Growth of the brands
Antwerp, where Modi spent part of his childhood, may be the world’s best-known diamond trading center. Yet around 150 miles (240 kilometers) north of Mumbai, in the city of Surat, lies another diamond hub, where an estimated 90% of the world’s diamonds are cut and polished.
The city’s manufacturing ecosystem depends on rough stones sourced from around the world, processed by tens of thousands of workers, and funneled into global markets through trading networks centered in Mumbai. The business runs largely on “trust,” according to Anoop Mehta, president of the Bharat Diamond Bourse, which operates one of the world’s largest diamond trading exchanges.
Modi was a product of this ecosystem. Firestar operated a large factory inside Surat’s Special Economic Zone, a duty-free enclave that allowed the company to cut, polish and manufacture jewelry for export markets.
Over the years, his business expanded internationally. In 2005, Modi acquired the wholesale division of American jewelry company Frederick Goldman, marking a breakthrough into the US market – a move he described as requiring “chutzpah” in an interview with CNBC, since no Indian company had ever taken over a US firm previously in the industry, he said.
Two years later, he bought Sandberg & Sikorski, another key jewelry supplier and vendor to the US Armed Forces.
Then, in 2008, a friend asked Modi to design her a pair of earrings, he said.
“When I saw the joy my creation brought to her, I decided that this is what I wanted to do,” he told Millionaireasia.
And in 2010, he created Nirav Modi.
India is widely considered to be where diamonds were first discovered, with the earliest finds dating back more than 4,000 years.
For centuries, India’s rulers treasured these precious stones, decorating their palaces, thrones, and crowns with them, and wearing them in lavish displays of wealth and opulence.
But many of these gems were ultimately taken from India by the British during colonization.
When India gained its independence in 1947, it was a deeply poor country, reeling from a violent partition that killed up to 2 million people. But even as India opened its doors to foreign investment in the 1990s, igniting a middle-class boom, the country carried the stigma of poverty.
For many Indians, Modi’s sudden rise showed the world that India too, can make it to the top. His brand shone as a symbol of national pride and soft power.
A defining moment came in 2010, when luxury auction house Christie’s sold one of his creations for just over $3.5 million.
Featuring a center stone of 12.29 carats, surrounded by rows of white and pink diamonds, the Golconda Lotus Necklace made headlines, and was placed on the cover of a catalog for the prestigious auction house – a first for an Indian brand.
“It was important in demonstrating how an Indian designer could create something worth millions of dollars with the best quality and most coveted stones in the world,” said the author Lall, who highlighted Modi’s craftsmanship and sourcing of the stones for the piece.
“He actually pored over years and years of Christie’s catalogs to see exactly what worked well in sales and what didn’t. Cut, color, clarity, design, value… were all taken note of before creating for the auction.”
Five years later, Modi launched his first international store on New York’s Madison Avenue. To mark the occasion, he hosted a grand opening event at Rockefeller Center that attracted several high-profile New Yorkers including Donald Trump Jr. and his then-wife Vanessa Trump. Actresses Naomi Watts and Nimrat Kaur, and supermodel Coco Rocha were among the attendees.
“The brand is created for a woman who wants to look spectacular every day,” Modi explained in a 2015 interview to mark the store’s debut. Highlighting his Maharani diamond necklace and earring set, valued at $1.6 million, which was for sale at the boutique, he added: “These diamonds were what Indian kings and queens wore centuries ago.”
The following year, model Rosie Huntington-Whiteley led his Fall/Winter campaign. In 2017, actress Priyanka Chopra was appointed global brand ambassador – the same year that Forbes estimated his net worth at $1.8 billion.
Additional stores opened in major cities including London, Hong Kong, Beijing, Macau, Las Vegas, Honolulu, Kuala Lumpur, and Singapore.
Lall called his New York and London boutique openings pivotal moments for Modi – not only because most businesses had to be around for several decades before they could afford those zip codes, “but also because he was the only Indian to do it.”
As Modi’s name appeared on billboards and storefronts across the globe, rumors and questions began to circulate inside the industry, with some asking where he got the money.
Modi’s primary bank for his business operations was Punjab National Bank (PNB), now India’s second-largest public sector bank. The alleged scam unfolded at its Brady House branch, located in Mumbai’s arts district – a highly sought-after area in the city’s affluent southern region. It was an unassuming location for an alleged multibillion-dollar heist, a small office with cramped desks where office workers sat behind glass windows. It’s now a cafe, serving organic coffee.
According to Indian investigators, certain PNB officials issued financial instruments known as Letters of Undertaking (LoUs) to companies controlled by Modi, Choksi and their associates. These guarantees enabled them to secure credit lines from foreign banks, which were then used to purchase diamonds and conduct international business.
LoUs were a trade-finance instrument unique to Indian business that served as a bank guarantee for overseas borrowing and were widely used by importers. They were discontinued not long after news of the alleged scam broke.
Investigators allege the scheme relied on a critical breakdown in internal controls. PNB officials allegedly issued the LoUs without obtaining the mandatory cash collateral required under banking rules and failed to record the transactions in the bank’s core systems, allowing the liabilities to remain hidden from auditors and senior management for years.
When, in January 2018, Modi’s associates applied for new letters, a new official in charge asked for collateral in cash, ultimately exposing the alleged scam.
A month later, the news broke. But Modi and his family could not be found.
As the scandal dominated primetime television and splashed across front pages nationwide, speculation over Modi’s whereabouts became a story in itself. Rumors swirled that he was hiding in Hong Kong, had resurfaced in New York, or was quietly living under the radar in London.
An Interpol red notice was issued for his arrest. At home, Indian authorities moved aggressively, seizing his properties and luxury assets, from high-end cars to jewelry and artworks.
As investigators from the CBI dug deeper into the case, they arrested two PNB employees for allegedly issuing the fraudulent letters, including deputy manager Gokulnath Shetty and junior clerk Manoj Kharat.
Both men were arrested in February 2018 and remain on bail awaiting trial. Both deny the charges.
CNN has contacted Shetty’s lawyer for a response.
Kharat told CNN he was made a “scapegoat” in the case.
He comes from a middle-class family in Karjat, a mountain town about 60 kilometers from Mumbai. As the eldest son, he said, he was a source of pride for his family, who celebrated when he landed what they saw as a secure and prestigious banking job in the city in 2014.
“Everyone was happy with me,” Kharat said. But he insists he was little more than a cog in the machine when it came to allegations of multibillion-dollar fraud.
“My work was to only enter data. That’s it. No power. No authorization. No authority.”
Years spent in and out of jail, coupled with mounting legal fees, have taken a heavy toll on his family, he added.
“Financially, I’ve completely collapsed. I’m not doing anything now. I have no source of income anymore. What am I supposed to do?”
Modi was arrested in London at the request of Indian authorities in March 2019, more than a year after the alleged fraud came to light. He has remained in a London prison since then, repeatedly losing appeals against his extradition.
Back in India, officials have said that Modi’s next destination will be the storied Arthur Road Jail – Mumbai’s largest and oldest correctional facility – where he’ll await trial. This high-security prison is a sprawling complex that houses thousands of detainees, including notorious gangsters, terrorists and prominent white-collar offenders.
His uncle and mentor Choksi was arrested last year in Belgium. He’s also fighting extradition to India, where he is expected to be housed in the same jail as his nephew. Choksi has denied several charges including fraud and money laundering. CNN has reached out to his lawyers.
A former employee of Choksi’s, Santosh Srivastava, told CNN he held concerns about the company’s financial dealings when he worked as head of the India retail arm of Gitanjali Gems.
He said he had met Modi several times at fashion shows and company events. Modi was incredibly “charismatic” and a “good negotiator,” Srivastava said, describing him as someone with the kind of personality that could command an entire room.
For the Indian government, the scandal was seen by some a political embarrassment, triggering protests by the opposition. Prime Minister Narendra Modi (no relation to Nirav Modi), who rose to power four years earlier on a promise of anti-corruption, faced intense media and public pressure to extradite the fugitive jeweler.
It also tainted the diamond industry in India, said Mehta, the president of Bharat Diamond Bourse. “There were some difficult times at that time due to the banks and everything,” he said, explaining it became harder for businesses to borrow money.
“From the financial side, because of the reputation, the market took a hit,” he said. “But things have moved on.”
For Indian prosecutors, very little has progressed in their pursuit for Modi, as the fugitive mounts an increasingly desperate effort to block his extradition to India.
His lawyers argue that sending him back could expose him to “torture and ill-treatment” and worsen his fragile mental health, making it possible that he could become unfit to plead.
The UK High Court dismissed his appeal, concluding that the Indian government’s assurances were sufficient to address concerns over his prison conditions and medical care. Modi would be housed in a specific section of Arthur Road Jail and would have access to specialist treatment, Indian authorities said, including care from a private doctor or mental health expert of his choice.
After hitting a legal wall in the UK, Modi reportedly took his case to the European Court of Human Rights (ECHR), which granted him anonymity. In July, Indian media reported that it too had been rejected.
The ECHR told CNN in a written statement that the court has a “public character save” in cases where an applicant has been granted anonymity or the case file is confidential. “There is no case pending before the Court in the name of Nirav Modi. This either means that nothing is pending before the Court concerning Nirav Modi; or that anonymity has been granted,” it said.
For years, Modi, a balding man of small stature, has held an outsized presence in the imagination of the Indian public. Though he gave interviews to international media during his meteoric rise, he was described as “extremely shy” by the author Lall.
“For someone in such a flamboyant business, he was actually very soft-spoken,” Lall said. “You had to strain to hear what he was saying.”
When and if he lands in India, news channels can be expected to provide wall-to-wall coverage.
For the Indian government, it would mark the long-awaited prosecution of a man whose name has become synonymous with corruption and deceit. For some Indians, it could calm some of the lingering anger that arose from the perception that the rich and famous could evade accountability.
“If he’s ultimately extradited it would likely be a spectacle,” said Lall.
For Modi, a man who sought to make an international name for himself in the diamond trade, it’ll be a homecoming. Just not the one he’d hoped for.