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A gaping and murderous rabbit hole: Life and death in times of Vyapam Scam

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By Ishan Kukreti   

Scams have never been a stranger to the world. Every now and then, there is a scam waiting around the corner, ready to say hello. India is so used to such acts of self-interests on a mass level that their occurrence is no more a surprise.

However in Vyapam, there is something morbidly awe-inspiring and scary at the same time. In drawing rooms, although jokes on politics turn no less cynical, a note of worry is nonetheless added to them when it comes to this cash-for-jobs scam.

Maybe this is because it is a scam which is tangibly close to the masses. Just like Bofors scandal, which pulled a string in people’s hearts, Vyapam has impacted the dreams of thousands of aspirants. A lot of people who, in this decade, wanted to be a doctor, engineer, management professionals, policemen, nurse, architect or even Hindi typist, feel that they have been wronged.

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On second thought, Vyapam is also different because there is blood on its hands, too much blood.

There have been 35-50 deaths according to various contradictory sources, while ‘over 25’ remains the official count so far. Yet, since its inception in 1970, proper exposure in 2013 and commission of SIT in 2014, many names behind it remain undisclosed.

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Here is a chronology that could be best compiled from the various sources available.

1970 – Pre  Medical Test Board is set up by the Government of Madhya Pradesh. It will later (in 1982) transform into Madhya Pradesh Professional Examination Board (MPPEB) a.k.a VYAPAM.

What is VYAPAM? – It is the only institute of its kind in the country that organizes competitive tests for entrance to various professional courses every year on a very large scale.

In 2007, Board of Directors for the self-financed Vyapam is reconstituted under Madhya Pradesh Professional Examination Board Act.

After a PIL by Dr Anand Rai, an ophthalmologist in 2009, Chief Minister of MP,  Shivraj Singh Chauhan sets up a committee to look into the matter.

On July 26, 2011, 8 people are imprisoned for impersonation in Pre-medical tests.

Between 2000-12, 55 cases of impersonation in exams filed across Madhya Pradesh.

The scam is exposed on 6-7 July in 2013 when Indore police arrests 20 people. Based on the information elicited from them on 13 July, cops arrest Dr. Jagdish Sagar, the kingpin of the racket involved in illegal admissions, in Mumbai.

Under mounting pressure from the opposition to initiate CBI probe, CM Chauhan concedes to constituting a Special Task Force (STF), on 23 August 2013. By this time, around 13 people related to Vyapam are already dead.

As the probe of the STF continues, results of 345 students who wrote that year’s PMT are canceled on October 9.

On 13 December, STF produces its charge-sheet against 34 people including Pankaj Trivedi (Exam controller MPPEB), Dr. Sanjeev Shilpkar and Dr. Jagdish Sagar’s accomplice Gangaram Pipliya.

On 18 December, Vyapam gets its first high-profile name. Ex-Higher Education Minister and then in-charge of MPPEB, Laxmikant Sharma is arrested for involvement in the scam.

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On 16 February 2014, based on a Gujarat forensic lab results, HC dismisses charges by Congress leader and former CM of MP, Digvijaya Singh that evidences are being tempered to protect Shivraj Singh Chauhan. Whistleblower Prashant Pandey, an IT consultant working for SIT, who is named the source of his information by Digvijaya Singh, says the evidence sent to the Gujarat lab was itself tempered. MP police files an FIR against him for leaking information.

Meanwhile, the scam swells up. Till 20 June, 500 are arrested and names of RSS chief, late KS Sudarshan, and senior functionary Suresh Soni come up.

In view of the increasing death toll and demand for inquiry by activists, MP High Court sets up a Special Investigation Team (SIT) on 5 November 2014. By this time, more than 20 people related to Vyapam have been pronounced dead.
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Anand Rai, one of the main whistleblowers, requests the court for security, following death threats. He is asked Rs.50,000 for it. After much struggle, he is assigned a security guard in 2015.

Prashant Panday, also facing death threats, too demands protection from Delhi High Court on 20 February 2015.

Another big name gets associated with Vyapam. MP Governor Ramnaresh Yadav is drawn into the scam on 24 February. But, as an officiating Governor, SIT couldn’t investigate him. The Supreme Court will hear a case to remove him from office today.

On 25 March, Sailesh, Ramnaresh’s son dies in Lucknow. His name too had surfaced in the scam. However, the family members deny foul play.

In a major shock to the fourth pillar of democracy, an Aaj Tak journalist, Akshay Singh, dies while investigating into the scam on 4 July.

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After three more deaths and mounting pressure from various quarters,  Shivraj Singh Chauhan agrees for a CBI probe into the matter on 7 July.

As of today, things stand here. Vyapam scam slowly breathes, hiding much in its bosom and SIT and STF cautiously investigate.

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 (Cartoons by Aseem Trivedi)

 

 

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PNB Fraud Fully Exposes the Malicious Intent Of Nirav Modi

For the past seven years, Nirav Modi’s three firms-Diamond R Us, Solar Exports and Stellar Diamonds-were in the process of procuring the LoU's from the Punjab National Bank (PNB)

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Nirav Modi's stamped his name in India’s top corporates with growing global prestige with his fame and affluence.
Nirav Modi's stamped his name in India’s top corporates with growing global prestige with his fame and affluence. Facebook
  • Nirav Modi is India’s one of the better- known diamantaires
  • Since 2013, Nirav Modi has been a regular on the lists of rich and famous Indians
  • Nirav Modi and his firms exploited the loopholes in the banking system to the fullest by seeking letters of undertaking

Who Is Nirav Modi

Nirav Modi is India’s one of the better- known diamantaires. Hewas born in a diamond-dealing family and spent his childhood in Antwerp, Belgium. At an early age of 19, he set sail for Mumbai. After spending nine years down the lane, he came up with his own company named Firestar Diamond Ltd. Initially, Nirav Modi started with selling loose stones and employed the only handful of people. But after attaining staggering success in his business till last year, the number of employees was more than two thousand.

As per the Firestar Group figures, the company’s revenue jumped over three years from 103 billion rupees to some 147 billion rupees by the 2016-17 fiscal year. Since 2013, Nirav Modi has been a regular on the lists of rich and famous Indians. According to Forbes magazine rankings, Nirav Modi’s net worth ranges to some $1.8 billion which itself explains the lavish lifestyle of the business tycoon.

Also Read: Biggest Bank Frauds Which Shook The Indian Economy

Nirav Modi’s stamped his name in India’s top corporates with growing global prestige with his fame and affluence. The Bollywood star and former Miss World, Priyanka Chopra also adorned with Modi’s jewels. From Hollywood’s red carpets to the Bollywood awards, his diamonds have sparkled on the bodies of actors and models like Kate Winslet, Dakota Johnson and Priyanka Chopra.

Last month, Nirav Modi was spotted at the World Economic Forum in Davos. A group photograph with Prime Minister Narendra Modi in the foreground and Nirav Modi in between rows of Indian business leaders have come under fire from the Congress party and notably carried out by the Indian media. Some political parties have taken a direct shot at Prime Minister for facilitating the run of Nirav Modi. In one of its tweet, Rahul Gandhi blamed Narendra Modi for this blunder.

Nirav Modi and his firms exploited the loopholes in the banking system to the fullest by seeking letters of undertaking (LOU) and thus raised credit from foreign banks to pay to its merchants. In simple words, LOU is a bank guarantee issued for overseas import payments. The scandal is termed as India’s biggest banking scams in ages.

For the past seven years, Nirav Modi’s three firms-Diamond R Us, Solar Exports and Stellar Diamonds-were in the process of procuring the LOU’s from the Punjab National Bank (PNB). Through these bank guarantees, Nirav Modi was able to raise the short-term loans from foreign branches of Indian banks to pay to its suppliers of raw material for his business.

A criminal complaint with the CBI was filed on January 29 accusing Nirav Modi and others of defrauding the bank and causing it a loss of Rs. 280 crore.
A criminal complaint with the CBI was filed on January 29 accusing Nirav Modi and others of defrauding the bank and causing it a loss of Rs. 280 crore. Wikimedia Commons

Due to the recent setback to the Punjab National Bank, its shares closed 2% lower at Rs. 125.65 against the previous day’s closing on BSE.

The CBI (Central Bureau of Investigation) booked the billionaire jewellery designer on January 31, along with his wife Ami, brother Nishal and business partner Mehul Choksi. The Nirav Modi’s wife is a U.S. citizen and said to be equally involved in the billion dollar fraud. The charges levelled against them were of allegedly cheating state-run Punjab National Bank to the tune of Rs. 280 crore. Within a fortnight of the first complaint by the Punjab National Bank, CBI was taken into the loop.

Also Read: 16 Indian origin people indicted for running a scam in the United States

Nirav Modi and his brother Nishal, who is a Belgian citizen, left India on January 1. However, it is still not known if they travelled together or separately. Meanwhile, Nirav Modi’s wife Ami, who is a US citizen, left India on January 6. Following the footsteps of his business associates, Mehul Choksi, the promoter of Gitanjali jewellery chain, left on January 4, the officials said.

After the exposure of the scam, CBI and the Enforcement Directorate moved to the External Affairs Ministry in order to get revoked the passports of Nirav Modi and his associates. Hence, the passports of Nirav Modi and Mehul Choksi got suspended for four weeks.

The last nail is struck by CBI as it has asked Interpol for help to arrest celebrity jeweller Nirav Modi, who is being investigated for one of the biggest bank frauds of the country.

Due to the recent setback to the Punjab National Bank, its shares closed 2% lower at Rs. 125.65 against the previous day's closing on BSE.
Due to the recent setback to the Punjab National Bank, its shares closed 2% lower at Rs. 125.65 against the previous day’s closing on BSE. Wikimedia Commons

The federal investigative agency and the law enforcement officials raided his jewellery stores and other businesses in Mumbai and New Delhi. However, Nirav Modi’s flagship company, Firestar Diamond, has denied any involvement in the case.

Also Read: 5 scams that rocked India in 2015

After this scam, Nirav Modi’s biggest rivals like Tanishq and Gitanjali Gems must be having a heave of sigh in terms of competition. As per the NDTV’s report, Nirav Modi is holed up at New York’s JW Marriott Essex House at 160 Central Park South, which includes both a hotel and apartments. The place is situated in a premier location overlooking New York’s well known Central Park.

In the following paragraph, thePNB’s swoop of Rs. 11,300 Crore is explained as it is:

  • There is a system of bank guarantee called a letter of undertaking (LOU). Under this a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of a short-term credit. So basically, the LOU serves the purpose of a bank guarantee.
  • In order to avail LOU, the customer or organization is expected to pay margin money to the LOU issuing bank and hence the credit limit is granted. But in the Nirav Modi’s fraud case, he didn’t pay up any margin money and on the top of that, no credit limit was set up for him.
  • On a regular basis, Nirav Modi managed to pay to its suppliers of rough stones for his three firms. The money was paid through the loans by banks including Axis Bank, and Allahabad Bank. It was done by Nirav Modi’s firms on showing the letters of undertakings issued by the Punjab National Bank.
  • Early this year, Punjab National Bank discovered that there was no official record of such letters of the undertaking before reporting the matter to the CBI.
  • In this case, Nirav Modi and his firms were supposed to repay the loans but till now, all these loans have allegedly been rolled over for want of funds. Incidentally, when the borrower fails to make the repayment, the bank which has issued the LOU is constrained to honour the commitments on the behalf of its customers.
  • On February 15, the RBI (Reserve Bank of India), the central finance body of India reportedly directed the Punjab National Bank to pay all these banks that gave loans to Modi’s firm on the basis of guarantees issued by the state lender.
  • So virtually, Indian bank’s foreign branches were making payments on behalf of Nirav Modi’s to its suppliers in the form of loans.
  • The hell broke out in January when Modi’s firm requested further LOUs for paying the overseas suppliers. The bank officials straightforwardly refused to entertain the request on the ground that Modi’s firm needs to keep 100% collateral for the same. On this, Modi’s firm argued that no such money was kept ‘on margin’ in the past either and this led to an investigation by the bank officials who scanned the records only to discover that there was no trace of any such transaction. Lately, it was known that the guarantees/ undertakings were issued by bypassing the rules in collusion with some Punjab National Bank
  • The violation of the Punjab National Bank’s end was a too glaring blunder to ignore. Hence, a criminal complaint with the CBI was filed on January 29 accusing Nirav Modi and others of defrauding the bank and causing it a loss of Rs. 280 crore.The complaint included Nirav Modi and Mehul Choksi, managing director of Gitanjali Gems. But later on, Nirav Modi’s brother and his wife were also found to be included in this startling scam.