Nirav Modi in the UK: Why India may have to prep for yet another long legal battle in fraudsters’ favourite land

It’s been two years since Vijay Mallya, the billionaire liquor king, flew out of India to the UK, leaving behind a pile of bad debt. Lalit Modi, the former Indian Premier League (IPL) chairman wanted in a cricket-scam, was already in Britain by then.

Some two years later, the duo is now joined by another alleged fraudster - Nirav Modi - who is at the centre of a multi-crore bank scam in India. In the case of at least Mallya and Nirav Modi, Indian investigators effectively let the two escape the law by not acting soon enough. This is despite having knowledge of the brewing problem in the respective cases.

 Nirav Modi in the UK: Why India may have to prep for yet another long legal battle in fraudsters’ favourite land

A file image of Nirav Modi. Couresy: Facebook.

In the case of Mallya, bankers knew well in advance of what lay in store for them since loans provided to the now defunct Kingfisher Airlines had turned into non-performing assets (NPAs) way back in 2012. The financial crisis engulfing Kingfisher Airlines was worsening with every passing year. Bankers waited patiently till the problem worsened irrevocably.

In the case of the PNB scam too, the fraud began in 2011. The Reserve Bank of India (RBI) had sent multiple reminders about certain suspicious practices with respect to the letters of undertaking (LoU)-based transactions and linking of SWIFT software to core banking systems. Proper inspection at the branch-level would have unearthed the shoddy transactions long back.

Both are examples where bankers and investigators acted too late.

But why is it that all alleged fraudsters find asylum in the UK? Why not in any other country? The United Kingdom is one of the most difficult countries to get an extradition request cleared. According to a report in the Hindustan Times, there are 16 extradition requests, by India, pending in the UK courts.

There are several cases where the Indian government has failed to bring back absconders and criminals (Iqbal Mirchi and Nadeem Saifi for instance). For the likes of Mallya and Modi, it wouldn’t be difficult to seek asylum using money-power and an army of lawyers.

India and the UK have an extradition treaty since 1992 but so far there has been no major progress on a majority of cases. Typically, the UK courts cite the treatment of the person to be extradited, individual rights in the event of extradition or deportation, and even Indian jail conditions as reasons for refusing to deport the accused.

For instance, in December, Indian authorities had informed a UK court that Mallya will enjoy good conditions in jail post his extradition and “will get facilities like a private toilet in his cell and home-cooked food, according to a Times of India report.

Nirav Modi’s escape to the UK is also a classic example of how Indian authorities failed to learn from their previous mistakes. In April, India had, in fact, pressed authorities in Hong Kong to arrest Modi, seeking to exploit a pact on the surrender of fugitive offenders. But, nothing much happened post that and Indian authorities had to remain silent spectators while Modi happily found his way to London.

Much like the Vijay Mallya case, the Nirav Modi case too will likely spawn a tough legal battle. Unlike Mallya, who has been playing victim saying he is only a corporate loan defaulter being unfairly treated by Indian banks and sleuths, Modi may not have a strong case as there is enough evidence to show that he orchestrated a clear fraud.

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Updated Date: Jun 12, 2018 18:50:30 IST