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The tarnished tycoon

Mr Modi was a quick learner. The book recounts how he wanted to capture every part of the diamond business, from trade in roughs to the luxury retail side.

Flawed: The rise and fall of India’s diamond mogul Nirav Modi
Cover of Flawed: The rise and fall of India’s diamond mogul Nirav Modi. Credits: Amazon.in
Vikram Johri
5 min read Last Updated : Oct 10 2019 | 3:24 PM IST
At the beginning of this book on fugitive diamantaire Nirav Modi, journalist Pavan Lall reveals that his first meeting with Mr Modi, in 2015, happened on account of the jeweller having created a global luxury brand with roots in India, one that boasted stores in marquee locations across London, New York and Hong Kong. 

From there to early 2018, when the Punjab National Bank (PNB) went to authorities to report a $1.8 billion scam perpetrated by Mr Modi, was a quick three years during which the diamantaire’s professional life unravelled. Mr Lall dives deep into those times, as well as the earlier halcyon days during which Mr Modi used ill-gotten money to build his personal brand.

Born in Belgium, Nirav Modi lost his mother at an early age. Details of this time of his life are sketchy but both his grandfather and father, it is known, tried unsuccessfully to make a career in the diamond trade. He moved to Mumbai in 1999 to work with his maternal uncle, Mehul Choksi, the owner of Gitanjali Gems and a member of the Palanpuri Jain community, a close-knit group that tightly controls the diamond business. 

Mr Modi was a quick leaner. The book recounts how he wanted to capture every part of the diamond business, from trade in roughs to the luxury retail side. He established his own business, Firestar International Private Limited, with an ambition to take it much further than what his uncle had achieved with Gitanjali.

To that extent, Mr Modi was keenly attuned to what the global diamond business demanded. He studied international styles and hired Hollywood stars to endorse his products. Mr Lall notes, for example, that Mr Modi researched decades’ worth of Christie’s catalogues to understand what made it to their cover before sending them jewellery pieces for auction. 

For the deeply secretive community that the Indian diamond merchants are, Mr Modi was both an exemplar and outlier. He did not mingle with Indian jewellers, preferring to work with a small set of trusted individuals, most of whom belonged to his extended family. His secrecy may have played some part in why it took so long for the scam to come to light, but jewellers Mr Lall spoke to said that this could also be an outcome of his solitary way of working. 

Some of his actions defied financial logic, and only make sense retrospectively given the revealed source of his funds. Money “flowed like water” when it came to branding initiatives, with full front-page ads in the Times of India and Financial Times and the hiring of mega-stars such as Priyanka Chopra and Kate Winslet. 

Given his deep involvement in the business, what was Mr Modi’s ultimate gameplan? Did he really build up a global brand and employ close to 2,000 people fully aware that this house of cards would come tumbling down one day? Mr Lall posits a couple of theories. One, Mr Modi’s plans to bring an IPO were genuine and would have given him the financial leeway to stop defrauding PNB.

While that is plausible, Mr Lall’s other postulation, that the business was an eyewash to launder money for high-net-worth clients and politicians, seems closer to the truth. An important piece of evidence points in this direction. Before the PNB scam, income tax authorities had already raided Mr Modi’s properties in early 2017 when it came to light that he had used his employees to “clean” close to Rs 300 crore worth of black money after demonetisation.

Mr Modi’s last public appearance was to a media person who accosted the jeweller on a London street in early 2019. He has since been arrested by the British police and efforts to extradite him to India are reportedly on. While most of the details of the case are now publicly available, Mr Lall raises doubts on how the entire operation could have been limited to one branch of PNB.

He also connects this to the larger rot within the public sector banking system that turned particularly galling during the UPA years, with the origin of a slew of scams, from the Commonwealth Games to coal mine allocations being traced to pliant bank officials. Mr Lall acknowledges that the situation has improved under the NDA government, but the latest scam involving PMC Bank indicates that the system is hardly out of the woods.

While Mr Lall is damning in his indictment of Modi the businessman, he reserves his opinion on Modi the person. The rub is that Mr Modi’s wrongdoing was not of kind but of scale. It is also a comment on the flimsy robustness of the system. Towards the end of Flawed, Mr Lall speaks sagaciously of the onus falling on “regulators, governments, media outlets…to monitor the actors in their society so as to be able to identify a trajectory that is too good to be true.”

Flawed: The rise and fall of India’s diamond mogul Nirav Modi
Pavan C Lall
Hachette
Rs 399, 201 pages

Topics :BOOK REVIEW

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