PNB fraud accused Choksi says Indian authorities ignoring due process
PNB fraud accused Choksi says Indian authorities ignoring due process
In a letter to the Central Bureau of Investigation (CBI), one of the lead agencies probing the alleged loan fraud, Choksi said the seizure of his assets, bank accounts and the shutting down of all his offices in India has caused prejudice against him.
In the letter dated Mar. 7, which was reviewed by Reuters on Thursday, Choksi said investigating agencies were acting with pre-determined minds and interfering with the course of justice.
In what has been dubbed the biggest fraud in India’s banking history, Punjab National Bank (PNB) and police have accused two jewelry groups — one controlled by diamond tycoon Nirav Modi and the other by his uncle Choksi — of colluding with some bank employees to secure credit from overseas banks using fraudulent guarantees.
Choksi, who heads Gitanjali Gems, which operates stores under banners including Gili, Nakshatra and Asmi, said in his letter that while the CBI has seized his assets, it has yet to submit a “Seizure Memo” in court, as required by law.
Choksi, who authorities say left India before the complaint against him was filed and whose passport has been suspended, said he feared greatly that he would not get “fair treatment and a fair trial” if he returned.
Both Choksi and Modi have denied the allegations and lawyers for the two key accused PNB employees in the case have also said they are innocent. The whereabouts of Choksi and Modi, who police say also left India in January, are unknown.
A spokesman for the CBI said he did not have any immediate comment on Choksi’s letter.
Choksi said in the letter he had traveled abroad on business before the complaints were made and his departure was not “a direct result” of the allegations against him.
Local media reported last week that a Mumbai court issued non-bailable arrest warrants against Modi and Choksi following an appeal by the Enforcement Directorate (ED), an Indian agency focused on foreign exchange and money laundering offenses.
Choksi said in the letter that he had undergone a cardiac procedure during the first week of February and he was unable to travel for at least four to six months as the procedure was yet to be completed. He did not say where he was.
The jeweller also told the agency he was being threatened by individuals with whom he has a business relationship and that his employees, customers and creditors have started expressing their “animosity” after his business was shut down.
Choksi, accused the media of unfair coverage in the letter, and said politicians were politicizing the case and creating a bias against him.
Police have also so far arrested 19 people including eight of PNB’s current and former employees, along with executives from jeweller Nirav Modi and his uncle Mehul Choksi’s companies.
A source and documents reviewed by Reuters on Tuesday showed the amount involved in the fraud is likely to rise beyond the $2 billion mark.
Saudi Arabia seeks stable, not soaring, oil prices
- Due to market tightness, Brent rose to nearly $80 per barrel but deteriorated to $78.80 on Friday.
- The average price for Brent crude per barrel over the past five months has been between $72.11 and $76.98
RIYADH: Oil prices rose this week on continuing market tightness. With the price rise, some Saudi-bashing has begun. Bloomberg reported that increasing prices were due to Saudi Arabia’s comfort with Brent crude above $80 per barrel. Such “analysis” is hogwash.
Due to market tightness, Brent rose to nearly $80 per barrel but deteriorated to $78.80 on Friday. WTI rose above $70 per barrel for the first time in three months and settled at $70.78 per barrel by the week closing.
The average price for Brent crude per barrel over the past five months has been between $72.11 and $76.98. As may be noted in those numbers, the Brent crude price has been resisting the psychological barrier of $80 per barrel. The fact is that, since October 2014, the Brent monthly average has never gone above $80.
The oil price outlook might be raised as a result of this upward tendency and the continuing tight oil market. For instance, with the latest numbers in hand, HSBC has revised its oil price forecast upward with Brent to average $80 per barrel in 2019 and $85 in 2020, before settling at about $75 in 2021.
Bloomberg was inaccurate about Saudi Arabia’s comfort with a Brent price above $80 per barrel. The Kingdom has never been among the bulls when it comes to oil prices. Again and again, Saudi Arabia has been a major advocate for stable oil prices, not increasing oil prices, which it views as unsustainable and damaging to the global economy. Bloomberg is also predicting that Saudi Arabia will follow its allegedly bullish nature and refrain from ramping up production to compensate for the oil lost once the US sanctions on Iran come into effect.
US Secretary of Energy Rick Perry has confirmed that Saudi Arabia, Russia and the US are well able to add enough crude oil supply into the market to compensate for Iran. Indeed, the Kingdom has begun to increase output to adjust for market needs, from 9.87 million barrels per day (bpd) in April to 10.42 million bpd in August.
The upward movement in oil prices came after strong fundamentals showed market tightness that spurred record levels of speculative traders, with nearly all betting on higher prices. The price rise also recognized that total US inventories are below the five-year average for the first time since May 2014. Oil prices have been gradually trending upward with gentle fluctuations. There have not been any steep surges or declines. There is nothing artificial about the trend. In reality, it is boringly predictable.
Last month, the International Energy Agency (IEA) reported OECD commercial crude oil inventories at 32 million barrels below the five-year average. Stocks at the end of Q2 2018 were up 6.6 million barrels versus the end of 1Q 2018, the first quarterly increase since 1Q 2017. The IEA also noted that global refinery throughputs in the second half of 2018 are expected to be 2 million barrels higher than in the first half of the year. These refined products stocks will draw down before building again in 4Q 2018.
Global crude oil inventories peaked in 2016. The OPEC+ agreement that worked for market balance was the reason for a fall in inventories. Since May 2017, global oil stocks have been on the decline and now global crude oil stocks are below the five-year average. Product stocks are also below that level, with strong demand and healthy refining margins.
Inventories have kept falling despite American producers pumping at all-time highs last month. It is only the massive flood of oil from the US which has kept crude oil prices at low levels from early 2015 to the end of 2017 — along with a resulting lack of upstream investment in the oil industry. Therefore, the IEA predicts that in 2022 spare production capacity will fall to a 14-year low.
Global oil markets are rebalancing. Oil prices started their upward momentum from the end of October 2017. They went above the psychological barrier $60 a barrel after 10 consecutive months of tireless efforts by OPEC and non-OPEC nations that started on January 2017. The market rebalancing will continue through the end of 2018, and beyond.
Such upward momentum in oil prices isn’t artificial movement because it came after many months without steep price fluctuations. In 2016, the Brent price average was $43. The 2017 Brent price average was $54, and prices just surpassed $60 in October 2017. The Brent average surpassed $70 in late March 2018 and has been hovering between $72 and $78 since. There is no evidence of a steep fluctuation or an artificial movement.
The claims of an artificial price movement have come just at the time when OPEC and the world are reaping the positive outcomes of 24 nations collaborating in output cuts that managed to successfully rebalance the oil market in a situation where global oil inventories were running at record highs. Also, these false claims came when the oil industry needs capital inflows to reactivate upstream investments for major international oil companies. Such investments are essential for the price stability that benefits oil producers and consumers globally. Low oil prices result in low investment in discovery and production of petroleum resources, which damages various industry sectors and energy needs. That leads to a vicious cycle of up-and-down price fluctuations.