ENS Economic Bureau By

Nirav Modi has reportedly shot off a letter to the Punjab National Bank accusing it of jumping the gun by going public with the unpaid debt of his companies. “This thereby jeopardised our ability to discharge the dues of the group to the banks,” news agency PTI reported quoting him as saying.

He also pegged his dues at less than Rs 5,000 crore - much lower than the over Rs 11,000 crore mentioned in PNB’s complaint.

“In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15) your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts,” he said.

With this, the billionaire jeweller has virtually ruled out paying back his dues saying PNB’s overzealousness has shut the doors on his ability to clear the dues.

“The erroneously cited liability resulted in a media frenzy, which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns,” Modi added.

PNB, the second largest state-run bank in the country, had on February 14 informed the exchanges of detecting $1.77 billion fraud at its Brady House branch in Horniman Circle area of south Mumbai. The lender named the firms led by Modi and his uncle Mehul Choksi’s Gitanjali Group and some other diamond and jewelry merchants as suspects.

The bank also filed criminal complaints with the CBI and the ED and named Modi’s brother, his American wife Ami, and uncle Choksi among others.

On his Rs 11,000 crore liability as claimed by PNB, Modi said, “As you are aware, this is entirely incorrect and the liability of the Nirav Modi Group is substantially less. Even after your complaint was filed, in good faith I wrote to you saying please sell/allow me to sell Firestar Group, or their valuable assets, and recover the dues not just from Firestar Group, but also from the three firms.”

Notably, he said he alone should be held responsible for the lapses. “My wife is not connected with any business operations at all and she has been wrongly named. My uncle is also wrongly named since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank,” he said, requesting the bank to permit payment of salaries to 2,200 employees from the balance lying in the current accounts.

Valuing his domestic business at around Rs 6,500 crore, he said “This could have helped reduce/discharge the debt to the banking system,” but quickly added that this is not possible now as all his bank accounts have been frozen and assets sealed or seized. He concluded by requesting the bank to “be fair, and support my efforts to make good all the amounts that are found due by my group to all banks”.

Gitanjali employees stare at uncertain future

With the promoters of Gitanjali Group absconding, board members resigning and the top management being questioned by investigating agencies, employees of the group are a worried lot. “It is a very chaotic situation. Nobody knows what is happening. People are scared, the phones are continuously ringing, and we are being asked all kind of questions. Many employees have proceeded on long leave,” a mid-level executive of the group told Express. The executive added the HR department has also stopped giving employees any update. Read story here.