The country’s financial crime agency is likely to file an application with the court next week to issue notices summoning jeweller Nirav Modi and his uncle Mehul Choksi, two of the main suspects in a $2-billion fraud at state-run Punjab National Bank, multiple sources told CNBC-TV18 on Friday.
After the Enforcement Directorate (ED) files an application, both the alleged offenders will have six weeks’ time make an appearance in the court, failing which the court will declare them as fugitive offenders.
The ED will also present a list of assets owned by Modi and Choksi to a special Prevention of Money Laundering Act (PMLA) court that can be confiscated, sources privy to the details of the investigation said.
The total value of assets that the ED is looking to confiscate is about Rs 5,000 crore.
This is not the first time that such an action has been initiated under the ordinance recently promulgated by the Narendra Modi government to deal with fugitive bank loan defaulters.
Earlier this week, a PMLA court issued summoning notice to liquor baron Vijay Mallya to be present against the judiciary or be declared a fugitive offender.
According to the law, a fugitive economic offender is any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, but has left India or refuses to return to India to face criminal prosecution.
The whereabouts of Modi and Choksi have been unknown since the Central Bureau of Investigation launched an investigation in February.
Modi, who owned a chain of boutiques from New York to Hong Kong, and Choksi are accused of defrauding banks by raising loans from overseas branches of Indian lenders.
In an effort to seize assets and recover dues from the two loan defaulters, the ED claimed that it has seized gems and jewelry worth over Rs 6,000 crore.
However, the recovery process took a major hit after the latest evaluation by the ED showed a drop in value of gems and precious stones seized as the quality of diamonds used by Choksi and Modi were fake and of low quality.