Nirav, Choksi Ignored Professional Ethics: Diamond Dealers

When asked about businesmen Nirav Modi and his uncle Mehul Choksi, Surat’s diamond merchants said they had stopped dealing with them. Surat is India's biggest centre for trading the precious gemstones.

The traders said the two jewelers had acquired a reputation for not following the industry's unwritten code of business ethics, according to Reuters.

When Punjab National Bank (PNB) said in mid-February it was the victim of a $1.77 billion fraud - a figure that has since risen to nearly $2 billion, the country was stunned. Modi and Choksi conspired with PNB employees to obtain fraudulent credit overseas, the bank blamed.

"Nirav Modi and Gitanjali's business model wasn't convincing to us," says Seventilal Shah, chairman of Venus Jewel. Shah said he had stopped dealing with their business some years ago.

"If they take goods on two months credit, and there is one month's delay it is fine. But if it is regular episodes of delays, then there is something wrong. That was the case with these guys," he added.

Also Read: America Won’t Reveal Nirav Modi Whereabouts

Nirav Modi, runs branded high-end jewelry stores that stretch from New York to Hong Kong. Mehul Choksi heads Gitanjali Gems and operates stores under banners including Gili, Nakshatra and Asmi. It is learnt that both Modi and Choksi hail from the Jain community of Gujarat.

Authorities suggest that both the businessmen left the country in early January and that their whereabouts are unknown. An official with the Directorate of Revenue Intelligence said that Modi was fined 480 million rupees for exporting and importing the same diamonds through Surat’s Special Economic Zone to inflate export numbers, back in 2015.

Also in July 2013, Indian market regulator, Securities and Exchange Board of India (SEBI), restricted Choksi from trading for six months for manipulating Gitanjali’s share price.