India seizes jeweler’s farmhouse, power plant after PNB fraud

Indian supporters of the Congress Party shout slogans as they burn effigy of billionaire jeweler Nirav Modi in New Delhi. Indian authorities said on Saturday they seized a farmhouse, a solar power plant and land belonging to the businessman. (AFP)
Updated 24 February 2018

India seizes jeweler’s farmhouse, power plant after PNB fraud

MUMBAI: Indian authorities said on Saturday they seized a farmhouse, a solar power plant and land belonging to billionaire jeweller Nirav Modi, at the center of an alleged $1.8 billion fraud against Punjab National Bank that has shaken confidence in state lenders.
Modi, who had a chain of boutique stores from New York to Beijing, and his uncle Mehul Choksi are both accused of perpetrating the biggest loan fraud in Indian banking history and are both out of the country.
India’s Enforcement Directorate, which fights financial crimes, said on Twitter it had taken possession of 21 properties belonging to Modi worth 5.24 billion rupees ($81 million) in the latest swoop in Mumbai and Pune, another city in western India.
Earlier in the week, the agency said it had seized luxury cars worth millions of rupees belonging to Modi and his firms in a case that has turned the spotlight again on India’s deep-seated corruption problem.
Modi and Choksi are accused of colluding with employees of Punjab National Bank, the country’s second-largest state lender, to fraudulently issue letters of undertaking over a seven year period which the businessmen used to obtain credit from overseas branches of Indian banks.
A lawyer for Modi has denied his client was involved in any fraud. Choksi’s firm, Gitanjali Gems, has also denied involvement in the alleged fraud.
At least a dozen people — six from the bank and six more from Modi’s and Choksi’s companies — have been arrested and the investigation is still continuing.
Separately, India’s federal police registered a case against a Delhi-based jeweller on a complaint of fraud filed by Oriental Bank of Commerce, another state-owned bank, a police source said.
The lender has alleged the firm, Dwarka Das Seth International, cheated the bank with the help of some of its officials, using Letters of Credit (LCs) — a banking instrument similar to those used by firms led by Modi and Choksi.
Reuters was unable to reach the Delhi firm as the phone numbers listed online did not work.


STC postpones its acquisition of Vodafone Egypt for second time

Updated 13 July 2020

STC postpones its acquisition of Vodafone Egypt for second time

  • Kingdom’s largest telecom company says it will need an additional two months to complete the deal

CAIRO: The Saudi Telecom Company (STC), the Kingdom’s largest telecom company, said that it will need an additional two months to complete a deal to purchase a 55 percent stake in Vodafone Egypt.

In January, STC was in agreement to buy the stake for $2.4 billion. In April, it extended the process for 90 days due to logistical challenges stemming from the spread of COVD-19. The company said in a statement that it would extend the period again to September for the same reason.

The Public Investment Fund, the Saudi sovereign wealth fund, owns a majority stake in STC. The ownership of Vodafone Egypt is divided between 55 percent for Vodafone International, which is the target percentage of the Saudi purchase offer, 44.8 percent for Telecom Egypt, and the remaining 0.2 percent for small shareholders.

Telecom Egypt is awaiting the results of Vodafone’s evaluation of the final share price to announce its position on the deal. A Telecom Egypt official stated that the company is still awaiting STC’s position regarding the purchase of the share. If the deal is not completed, it may be presented with its rights to acquire Vodafone’s share, which would allow it to take over 99.8 percent of the company’s shares, leaving 0.2 percent for small investors.

Ashraf El-Wardany, an Egyptian communications expert, pointed out the importance of waiting until the procedures between STC and the Vodafone Group are complete. The results will determine the next steps by Telecom Egypt.

El-Wardany said that the Saudi operator must, after completing the relevant studies, submit a final binding offer at the share price and any conditions for purchase. If approved by Vodafone, it must submit the offer with the same conditions and price to Telecom Egypt, provided that the latter responds within a maximum period of 45 days to determine its position regarding the use of the right of pre-emption and the purchase, or lack thereof, of Vodafone’s share.

According to El-Wardany, there are other possible scenarios. Vodafone International may not be convinced of the offer or the conditions presented by the Saudi side and the sale may be withdrawn, or the Vodafone group may be ready to sell and has prepared another buyer for its stake in Egypt in the event of rejecting the Saudi offer. It may also it back away from the deal and continue to operate in Egypt for a few more years.

El-Wardany said that if Telecom Egypt decides not to use the right of pre-emption to acquire the remaining Vodafone shares for any reason, it will continue with its 44.8 percent stake.
It may also resort to selling all of its shares or part of it to the Saudi side or to any company that wants to acquire its stake.

“This raises the question of whether STC can acquire all of Vodafone’s shares,” El-Wardany said, adding that the coming months “will make the answer clear.”