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Old 20th February 2018, 12:24   #46
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

Ethics and integrity are very very rare in business domain. Even if you have to look at biggest corporations of the world. Just that many of the frauds do not impact public at large and we never come to know about them.
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Old 20th February 2018, 13:10   #47
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

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Originally Posted by joe1980 View Post
Came across this news article:

What is suspicious to know is that this guy left with his family to the US in January So there must be some sort of information to him that the scam is about to burst. How is this possible?
Please read the letter wrote by Nirav Modi to Bank - link. He was in touch with the bank before the bank made the news public. So he would have very well known what was going to go down. He would have definitely had a law firm recommend him what his next steps should be when the negotiations were failing. Till the time bank didn't report it to authorities, there would be no red corner notice issued for a person. Hence, he was free to travel as a normal citizen.

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I do not support this arrogance in any way. But in terms of the bank trying to recover any money, I wonder if they would be better off trying to recover the money while the brand has some value left in it. Take the example of Kingfisher; the brand had negative value associated with it when the banks turned up to as for their money. Essentially the entire concept of brand value does not really work as a tangible asset would. .
It is not so that banks would have extended them loans without any tangible assets just based on some politicos or brand name's goodwill. Going by your example of Kingfisher - For loans extended to kingfisher, assets like Kingfisher House (Vile Parle), Kingfisher Villa, Privately owned Kingfisher planes, Mallya's car collection were all part of the assets given as collateral. When the bank tried to sell these assets they couldn't recover the right price. But none of them sold for the valuation price. Example - Kingfisher villa was sold for 73 crores (after 3 failed auctions) where as it was valuated at 150 crores when the company was on a high - link

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My two cents on this, when you have corrupt bank employees who accessed and shared level 5 swift password (link) with Nirav Modi's company whatever checks you may have in place will go for a toss. In this country, when people are ready to do "anything" to make a quick buck, morality has gone down the drain. There are only rules that can be made but their implementation lies in the hand of devious, self centered humans who just think of their benefit.

So if you think scams will not happen just because we set an example by crucifying the likes of Mallaya, Modi etc. You are wrong, there are many more Mallaya's, Modi's waiting to take their chances and there are many "Shetty's" ready to help them make that money. Till the time the self conscious of the people awakens, we will see these scams coming to light again and the law enforcement trying to bring accused to justice and recover what can be recovered.
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Old 20th February 2018, 14:58   #48
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I have a tangent view on this episode.
All started during Alan Greenspan tenure. Greed is good, but with a catch. The USA and now landing on our shore. Basically the web of easy money to stimulate demand. Malaya or Nirav just used cheap funds to set up a new Empire. The idea behind low interest rate is to create demand. Easy money has its own share of problems which they are facing now. Irrational exuberance.

Now sure how many in India are paying a higher EMI than the worth of their flats, or is it too early.
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Old 20th February 2018, 16:01   #49
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Originally Posted by ritz3645 View Post
I have a tangent view on this episode.
All started during Alan Greenspan tenure. Greed is good, but with a catch. The USA and now landing on our shore. Basically the web of easy money to stimulate demand. Malaya or Nirav just used cheap funds to set up a new Empire. The idea behind low interest rate is to create demand. Easy money has its own share of problems which they are facing now. Irrational exuberance.

Now sure how many in India are paying a higher EMI than the worth of their flats, or is it too early.
+1 to that. Bankers greed to improve the bottom line thereby providing easy loans and inflating the value of all the asset classes whether they are worthy or not. As you mentioned, western countries knew these problems long back (early 20th century) and India is still learning the hard way instead of learning from the other's mistakes.
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Old 20th February 2018, 17:38   #50
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

More interesting facts coming to light:
"Nirav Modi, the celebrity diamond designer blamed for one of the country's largest bank fraud, had been raided by income tax officials in January 2017 as part of the crackdown on black money after the government's decision to ban high-value currency notes, sources have said."

If true, this reinforces the belief that his escape was in connivance with these officials. Or, they were stupid to not have smelt any rats in the raid and/or in the follow up analysis of his transactions. Either way, these officers should be first in the dock in his absence. But they won't be - any guesses as to why?

Last edited by Sawyer : 20th February 2018 at 17:41.
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Old 20th February 2018, 21:30   #51
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

This cartoon by MansoorNaqvi is a telling commentary on the current crisis. When you deal with (reverse) loan sharks day in and day out, a man with a mask and a gun can only bring comic relief.

The talented scamsters: Nirav Modi, Ashish Chordia & others-img20180220wa0018.jpg

Picture Courtesy: WhatsApp

Last edited by dailydriver : 20th February 2018 at 21:33.
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Old 20th February 2018, 23:15   #52
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

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Originally Posted by Nissan1180 View Post
...The rent for the store could be about a million dollars a month. Yet, I have never seen a customer there. Maybe I'm being naive or ignorant, but they don't seem to have many visitors. There are shops by other luxury brands, but none of them are empty, especially at MBS which is a tourist hotspot.

....
Apparently, he kept transferring diamonds from one company to another and kept taking loan showing sales for one company and another loan for purchases by another company. All the while there was no real sale only transfer of his own inventory.

You might want to check this article on news18

Last edited by SDP : 21st February 2018 at 08:33. Reason: Trimming quoted portion
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Old 21st February 2018, 11:15   #53
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

So far as I know, the scam happened, because the SWIFT system was not linked with CBS and users(bank employees) were supposed to enter all SWIFT transactions into CBS manually. In simple way, the payment processing communication system was not linked with Books of Accounts, so the payment of this scam amount was never came in books of accounts & remained unchecked. If this is true, then the way I look at it is:-

Involved persons may be guilty. Guilty of taking undue advantage of the system or may be unintentional but lack of quality working, no two ways about it.

However, why the hell it was not linked? Isn't it the responsibility of GOI or RBI or the bank itself to ensure that? GOI had mandated Aadhar linking with every possible things on the earth for us, fine, why cant it make such crucial linking mandatory for Banks? especially when its public money. Is it a rocket science or what? Somebody had taken the advantage, agreed, law will take its own course. But first, how & why the hell he could manage to take such advantage?

I remember in one post regarding toll tax, I mentioned the same thing, accountability of GOI's working. Take tax/money from us but pay it back, show our money is utilized... for us! ; instead we get all these scams, every singly time. And trust me, we all will forget this episode as well, and the beneficiaries will continue to enjoy the stay abroad or will live a life king size. And we? huh! will continue to pay tax & make complaint here & there, in the air, which nobody will ever listen, until election comes!!

Dont get me wrong, I am noway in support of anybody, just expressing my thought.

Last edited by cp171185 : 21st February 2018 at 11:40. Reason: Correction.
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Old 21st February 2018, 11:40   #54
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In US most of the top present and past leadership of the bank, the auditors and the majority shareholder would be sued and will be in jail if something like this had happened. It's a compliance and business process integration issue more than anything else.

In fact Nirav Modi may go Scot free there unless you are able to explicitly prove that he actually paid the bank staff to subvert/cheat.
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Old 21st February 2018, 12:47   #55
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In US most of the top present and past leadership of the bank, the auditors and the majority shareholder would be sued and will be in jail if something like this had happened. It's a compliance and business process integration issue more than anything else....
Not really.

I'd point you to the 2008 mortgage lending crisis in the US that triggered a global meltdown. Nobody of any consequence has seen prosecution, let alone jail time. Plenty kept their jobs, landed even more influential ones, all the while making a load of money. Watch the documentary Inside Job if you'd like to know more.

It's a greed thing, everything else is consequential.
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Old 21st February 2018, 12:49   #56
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

So many people writing here shows the frustration that exists in all of us towards this moral degradation in our society. It pains when you see people getting away with such colossal scams.

Until and unless the implementation of the law improves, nothing is going to change. Unfortunately the biggest moral deficit seems to lie with those who are supposed to be the implementer of these laws. So how do you change the system? And here lies India's real problem. Do you honestly believe that Vijay Mallya got away, or was he allowed to get away? Do you believe that he cannot be brought back or there is no real political will to get him back? I am of the firm opinion that if the Govt of India decides that they need VM back in India, enough and more pressure can be created on the British to deport him. Indian can use all tactics available at her disposal to bring on the pressure on the British. But the fact is that this political will doesn't exists across India's political spectrum.

Thugs like Nirav Modi can exploit systemic failures and easily get away, shows that these failures are kept in the system deliberately and with a clear intent. We say that he has connections; what are these connections? Who are these connections? To me they are simply put an understanding of sorts which states that 'I scratch your back and you scratch mine'. Simple. And given that ethics and morals are mere words in a cobweb-infested dirt-accumulating proverbial dictionary, it matters little to those in positions of power to take any action against these criminals.

People like you and me will weep, cry and whine for a few days and everything will be back to normal. And we will await the next big scam to hit us and one more of these high-class-connected person to gleefully leave this country. And the media channels will fully utilize the occasion to increase their TRP ratings by running kangaroo courts. And we imbecile and delusional public will continue to await for the real courts to deliver some justice.

C'est la vie.
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Old 21st February 2018, 12:55   #57
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Mortgage lending crisis was different imho. It was a bubble and not really a compliance/governance issue in a specific bank. Inspite of that people did loose jobs and some ended in jail.
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Old 21st February 2018, 14:51   #58
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Mortgage lending crisis was different imho. It was a bubble and not really a compliance/governance issue in a specific bank. Inspite of that people did loose jobs and some ended in jail.
The base issue was the same, bankers' greed supplemented by lax or non-existent regulation, made worse by lobbying and vested interests keeping the status quo.

India's issues aren't limited to a single bank either, there are plenty of skeletons to go around.
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Old 21st February 2018, 17:02   #59
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The base issue was the same, bankers' greed supplemented by lax or non-existent regulation, made worse by lobbying and vested interests keeping the status quo.

India's issues aren't limited to a single bank either, there are plenty of skeletons to go around.
You obviously have a very different POV on this. Let's agree to disagree then. I still go by what i said. Mortgage lending issue was a real estate bubble across the US mortgage market. Bubbles burst all the time because of legitimate business reasons.

What happened in PNB was not really a bubble. It was a compliance/auditing/not following due process issue. It's the bank's job to make sure that processes are water tight and there are a bunch of regulations on this about fixing accountability. These regulations were further strengthened after 2007-2009 too. So yes in my opinion - if PNB was based in US, the implications for the Bank and it's top employees would be very different.
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Old 21st February 2018, 17:13   #60
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Default Re: The talented scamsters: Nirav Modi, Ashish Chordia & others

Now the FM is also piling on to PnB. But what about the equal culpability of the ED that reports to him as well, for allowing Modi to fly away? What about the culpability of the Home Minister who the CBI reports to? None of these issues came to light after the man left the country just last month, they have been know for over a year. It is the same Mallya story. And of all the other well connected fugitives from justice that do this with an alarming regularity. Using the black wealth in overseas accounts to then live on; of which not a single paisa has been brought back to the country by GoI.
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