Fugitive diamantaire Nirav Modi was denied bail a second time Friday as a UK court ruled that there were “substantial grounds” to believe that he would fail to surrender and also noted that “very unusually in a fraud case” the accused had made death threats to witnesses.
At the end of the second bail application hearing at the Westminster Magistrates’ Court in London of the 48-year-old prime accused in the Punjab National Bank (PNB) fraud case, Chief Magistrate Emma Arbuthnot ruled that the one million pounds his legal team had offered as security for bail, as well as the offer to meet stringent electronic tag restrictions on their client’s movements, failed to convince her to grant bail.
She set Modi’s next remand hearing for April 26 via video link from jail.
“This is a case of substantial fraud, with a loss to a bank in India of between USD 1-2 billion. I am not persuaded that the conditional bail sought will meet the concerns of the government of India in this case,” she noted.
The court was told that Modi’s son, who had been at school in London, had now left for higher studies in the US, which led the judge to conclude that Modi not only had a “lack of community ties” in the UK but also large resources at his disposal to try and flee the country.
The Crown Prosecution Service (CPS), arguing on behalf of the Indian government, had also flagged Modi’s attempt to acquire the citizenship of Vanuatu, a remote island country located in the South Pacific Ocean, in late 2017 as a sign of a man trying to evade justice.
The judge agreed that the action was “some way away from a person running a series of businesses” from the UK and that the move to seek citizenship of Vanuatu did indicate that he was trying to “move away from India at an important time”.
The judge reiterated her previous strong direction to the Indian authorities to ensure all the documents submitted in the case are “properly paginated with a proper index”, before setting May 24 as the deadline for the CPS to submit their documents in the case before the court can decide on a potential hearing date for a full-fledged extradition trial.
Modi, meanwhile, can make a third bail application at the same court but only if the grounds for the bail plea were substantially different. Alternatively, his defence team has a couple of weeks to also move a bail application in the High Court.
During Friday’s hearing, the CPS strongly opposed bail on the grounds that Modi posed a significant flight risk and had even issued death threats to witnesses related to his fraud and money laundering case.
Looking more dishevelled and dressed in a similar white shirt as his first bail hearing last week, Modi was brought up to the dock to be produced before the judge and sat behind a glass enclosure as the hearing got underway.
The court was told that Modi was the “principal beneficiary” of the fraudulent issuance of letters of undertaking (LoUs) as part of a conspiracy to defraud PNB and then laundering the proceeds of crime.
CPS barrister Toby Cadman told the judge that there was a “substantial risk” that the prime accused in the PNB fraud to the “amount of between USD 1 and 2 billion”, would flee and attempt to interfere with witnesses and evidence.
“Given the nature and seriousness of charges and the resources available to him there will be an overwhelming desire to flee the jurisdiction and interfere with the administration of justice,” said Cadman.
Giving details of Modi’s attempt to interfere with witnesses, the CPS barrister made specific reference to one such witness, Ashish Lad, who Modi “threatened to kill in a phone call” and also offered him an incentive of Rs 2 million to provide a false statement.
Nilesh Mistry and three other witnesses were similarly targeted by Modi and mobile phones and a server holding “material critical to the fraud” were destroyed at request of Modi, raising fears of further “destroying of evidence” if bail was granted, the court was told.
“Due to the nature of his business he has at his disposal diamonds, gold and pearls,” said Cadman.
The court was informed about Modi’s attempt to attain citizenship in jurisdictions less likely to be willing to extradite him to India, including Vanuatu at the end of 2017 on the basis of a USD 200,000 investment. However, the Vanuatu citizenship request was declined as a result of the ongoing Indian criminal probe.
Modi’s defence team, led by Clare Montgomery who was also the barrister for former Kingfisher Airlines boss Vijay Mallya in his extradition case, opposed the CPS claims of Modi being a flight risk and stressed that in fact Modi sees UK as a “haven where his case will be fairly considered”.
“The size and nature of these allegations is not a safe touchstone by which you can judge if he should be granted bail,” said Montgomery, who claimed a series of “underlying issues” were behind the PNB withdrawing insecure lending.
At the very start of the hearing, Judge Arbuthnot said she was getting a sense of “deja vu”, in reference to her having ordered the extradition of Mallya in December last year.
A three-member joint CBI and Enforcement Directorate team from India was present in court and handed over a new file of evidence which was review by the judge before the hearing.
Modi is believed to have been living in the UK on an Investor Visa, applied for in 2015.
He was denied bail at his first hearing soon after his arrest by Scotland Yard officers from a central London bank branch. He is lodged at HMP Wandsworth prison since then.