The South Asian Times

22 March 2019 04:35 AM

The Flip Side of Nirav Modi case

Why he should sue PNB !! – a viral post reproduced

Let's ask a stupid question:  where is the cheating?

1. In the last 7 years NM paid each and every LOU (Letter of Undertaking) on the due date.  Each LOU comes due in 90 days.  He paid all of them in last 7 years including the last one due in January, was also paid.  Hence, there is no default from his side at all.

2.  As per the papers, NM always promptly paid all suppliers. He also promptly paid for the Rhythm House property and promptly paid Priyanka Chopra.  Hence, he has not cheated either the bank or any of his suppliers. 

There is no NPA at all.

3.  In fact all this only came to light when his managers asked for the same trust and faith based guarantee from the new manager.  NM must have had intention of paying, else, if there was intention to cheat, why would they make a new manager aware of the old things?  NM and staff would have quietly run away and left long back, if their intention was to cheat.  But even before leaving, they paid the LOU on due date in January.  There are no more LOUs due even today. 

3.  The only fault is that NM has taken is an LOU, which is like a bank guarantee, without giving collateral.  But this is not cheating of money - this is simply a risk that PNB has taken. In the first year it was a small risk and in the later years as his business grew it became bigger.  But he always paid in 90 days.  So it continued. 

4. How it could have been all solved:

PNB should have called NM and said that he needs to give collateral against the Rs 11,000 Cr. 

As he already has stock worth 5,000 Cr, plus his is a running business worth at least 10 X the earnings, plus his brand, the bank could have taken temporary ownership of his business until he paid back.  He could have even sold the whole business to high-end luxury companies abroad.  For more than 11,000 Cr. 

Surely he would have paid off the balance 6000 Cr as income from his business.  In one or two years.  How?

5000 Crores of diamonds in stock means at least 15,000 Crores worth Jewelry at retail, given his exorbitant margins.

Hence if PNB had left it as a running business and negotiated the payment terms with him, everything would have worked out.

5.  Instead, even though he has not defaulted on a single obligation to the bank or to a supplier, they have labeled him a cheater and fraud, locked out his business, seized his assets and finished off his company. 

Thus a man who was totally paid up till date, and who had enough assets and business income has been labelled as a Cheat and Fraud and had to run away. 

He should sue PNB for ruining his business, labeling him as cheat, spoiling his name and making his business value turn to zero.

PNB did not even call him and ask him to pay.  NM was not even given a chance to give collateral.

The South Asian Times called Nirav Modi’s Madison Avenue boutique in New York on Tuesday. The lady at the other end said they are open for business, but she refused to confirm or deny whether he was in town as reported by some in the Indian media.   

Update: 21 Feb, 2018