London: A luxury apartment in London used by Nirav Modi and held in a trust can be sold for a value not less than GBP 5.25 million after a high court ruling in London on Wednesday.
Master James Brightwell, the judge presiding over a hearing attended remotely by the 52-year-old fugitive diamond merchant from Thameside prison in south-east London, accepted representations from the Enforcement Directorate (ED) to hold the proceeds from the sale of 103 Marathon House in a secure account after all “pressing liabilities” of the trust have been cleared.
The case involves Trident Trust Company (Singapore) Pte Limited as the claimant, seeking to sell its apartment asset in the Marylebone area of central London, and the ED arguing that the trust’s assets represent the proceeds of a massive fraud on the Punjab National Bank (PNB) for which Nirav is facing extradition proceedings.
“I am satisfied that it is a reasonable decision to allow for the property to be sold for GBP 5.25 million or above,” Master Brightwell concluded.
He took note of ED’s other objections in the case relating to the creation of the trust itself, which were not pursued at this stage of the case. Barrister Harish Salve, appearing on behalf of ED, told the court that they had agreed to the sale in principle based on undertakings that protect the interests of the ultimate beneficiary, which may be the Indian exchequer, and averts a “fire sale” of the asset.
The judge noted that the case was a “very unusual one”, which involved a trust created in December 2017 in the name of Nirav Modi’s sister Purvi Modi and their family as beneficiaries.
Under an arrangement with the Indian authorities, Purvi Modi and her adult children did not participate in the proceedings. It left Nirav Modi, one of the named defendants in the case, claiming that he was the “true settler” of the trust and should be treated as a beneficiary. He also alleges that he gifted, or made a loan of, GBP 625,000 to the trust to procure the purchase of 103 Marathon House, which also entitles him to the proceeds from the sale.
Dressed in a casual t-shirt and sweater, Nirav followed Wednesday’s proceedings from a room in the prison and interjected to flag an article in The Financial Times’ about another money laundering case being investigated by ED. It then emerged in court that the current tenant of 103 Marathon House and one of the main prospective buyers, who had offered to buy it for GBP 5.25 million, is an Indian-origin entrepreneur suspected in the investigation.
Nirav raised the concern that any money received from such a sale could be frozen by ED at a future date, which led the court to insert a caveat in the court order that there should be due consideration given to the proposed purchaser.
In 2022, Nirav lost his legal battle in the Supreme Court against being extradited to India in the estimated USD 2 billion PNB loan scam case. But his case is now said to be “statute barred”, indicating further pending litigation.
Meanwhile, he has been appearing virtually from prison for related hearings, including for pending legal costs, or fines, amounting to GBP 150,247.00, accrued over his failed extradition appeal proceedings.
Earlier this month, another High Court summary judgment ordered a Dubai-based company connected with Nirav Firestar Diamond FZE to repay a loan amounting to over USD 8 million owed to the Bank of India.
Nirav Modi was arrested on March 19, 2019, on an extradition warrant based on the Central Bureau of Investigation (CBI) and ED charges against the businessman. There are three sets of criminal proceedings against the diamantaire in India the CBI case of fraud on the PNB which caused losses equivalent to over GBP 700 million, the ED case relating to the alleged laundering of the proceeds of that fraud and a third set of criminal proceedings involving alleged interference with evidence and witnesses in the CBI proceedings.
Then UK Home Secretary Priti Patel ordered Nirav’s extradition based on Judge Sam Goozee’s Westminster Magistrates’ Court ruling in April 2021.
