Nirav Modi should Sue PNB
*WHY NIRAV MODI SHOULD SUE PNB*
for 50,000 Crores.
Let's ask a stupid question: where is the cheating?
1. In the last 7 years NM paid each and every LOU on the due date. Each LOU comes due in 90 days. He paid all of them in last 7 years including the last one due in January, was also paid. Hence, there is no default from his side at all.
2. As per the papers, NM always *promptly paid all suppliers*. He also promptly paid for the Rhythm House property and promptly paid Priyanka Chopra. Hence, he has not cheated either the bank or any of his suppliers.
There is no NPA at all.
3. In fact all this only came to light when his managers asked for the same trust and faith based guarantee from the new manager. *NM must have had intention of paying*, else, if there was intention to cheat, why would they make a new manager aware of the old things? NM and staff would have quietly run away and left long back, if there intention was to cheat. *But even before leaving, they paid the LOU on due date in January. There are no more LOUs due even today*.
3. The only fault is that NM has taken is an LOU, which is like a bank guarantee, without giving collateral. But this is *not cheating of money* - this is simply a *risk* that PNB has taken. In the first year it was a small risk and in the later years as his business grew it became bigger. But he always paid in 90 days. So it continued.
*Risk is not cheating it may be a high risk, it may be against norms and prudence, but it is not cheating*.
4. *How it could have been all solved*:
PNB should have called NM and said that he needs to give collateral against the 11,000 Cr.
As he already has stock worth 5,000 Cr, plus his business is a running business worth at least 10 X the earnings, plus his brand, the bank could have taken temporary ownership of his business until he paid back. He could have even sold the whole business to high end luxury companies abroad. For more
Than the app 11,000 Crores.
Surely he would have paid off the balance 6000 Crores as income from his business. In one or two years. How?
5000 Crores of diamonds in stock means at least 15,000 Crores worth Jewellery at retail, probably much more, given his exorbitant margins. So of course in two years he can pay off the 11,000 Crores.
*Hence if PNB had left it as a running business and negotiated the payment terms with him, everything would have worked out*.
5. Instead, even though he has not defaulted on a single obligation to the bank or to a supplier, they have labeled him a cheater and fraud, locked out his business, seized his assets and finished off his company.
Thus a man who was totally paid up till date, and who had enough assets and business income has been labelled as a Cheat and Fraud and had to run away.
He should sue PNB for ruining his business, labeling him as cheat when in fact no due date was there and he was fully paid, spoiling his name and making his business value turn to zero.
PNB did not even call him and ask him to pay. NM was not even given a chance to give collateral
And now he and his business has been finished - even though he does not owe a single rupee to PNB. more
for 50,000 Crores.
Let's ask a stupid question: where is the cheating?
1. In the last 7 years NM paid each and every LOU on the due date. Each LOU comes due in 90 days. He paid all of them in last 7 years including the last one due in January, was also paid. Hence, there is no default from his side at all.
2. As per the papers, NM always *promptly paid all suppliers*. He also promptly paid for the Rhythm House property and promptly paid Priyanka Chopra. Hence, he has not cheated either the bank or any of his suppliers.
There is no NPA at all.
3. In fact all this only came to light when his managers asked for the same trust and faith based guarantee from the new manager. *NM must have had intention of paying*, else, if there was intention to cheat, why would they make a new manager aware of the old things? NM and staff would have quietly run away and left long back, if there intention was to cheat. *But even before leaving, they paid the LOU on due date in January. There are no more LOUs due even today*.
3. The only fault is that NM has taken is an LOU, which is like a bank guarantee, without giving collateral. But this is *not cheating of money* - this is simply a *risk* that PNB has taken. In the first year it was a small risk and in the later years as his business grew it became bigger. But he always paid in 90 days. So it continued.
*Risk is not cheating it may be a high risk, it may be against norms and prudence, but it is not cheating*.
4. *How it could have been all solved*:
PNB should have called NM and said that he needs to give collateral against the 11,000 Cr.
As he already has stock worth 5,000 Cr, plus his business is a running business worth at least 10 X the earnings, plus his brand, the bank could have taken temporary ownership of his business until he paid back. He could have even sold the whole business to high end luxury companies abroad. For more
Than the app 11,000 Crores.
Surely he would have paid off the balance 6000 Crores as income from his business. In one or two years. How?
5000 Crores of diamonds in stock means at least 15,000 Crores worth Jewellery at retail, probably much more, given his exorbitant margins. So of course in two years he can pay off the 11,000 Crores.
*Hence if PNB had left it as a running business and negotiated the payment terms with him, everything would have worked out*.
5. Instead, even though he has not defaulted on a single obligation to the bank or to a supplier, they have labeled him a cheater and fraud, locked out his business, seized his assets and finished off his company.
Thus a man who was totally paid up till date, and who had enough assets and business income has been labelled as a Cheat and Fraud and had to run away.
He should sue PNB for ruining his business, labeling him as cheat when in fact no due date was there and he was fully paid, spoiling his name and making his business value turn to zero.
PNB did not even call him and ask him to pay. NM was not even given a chance to give collateral
And now he and his business has been finished - even though he does not owe a single rupee to PNB. more
Viewed by 10
on 18 nov17 my wife got two stents at gb pant hospital but failed on 18 Jan18 and advice by doctor at gb pant hospital to get bypass surgery which again cost of around rs.80,000/- finally we went to Gangaram hospital and got bypass surgery....money or cost of stent matters but not cost of live more
Feb 21
I think, each LC need Margin Money Deposit and or Bank Guarantee for which again, a 20% Margin Money is to be Deposited . And, such also are charged with minimum Bank Charges . Each repeat / rolleover of L.C. need such Margin Money Deposits and, the Charges to the Bank. THESE ARE THE LOSSES TO THE BANK . In case the LC material is of low quality or damaged, The Entrepreneur will be responsible to repay the amount of losses and damages to the Bank since Banks now, PNB aught to shell down the same and depend on the Entrepreneur for inturn repayment to the Bank. THIS IS THE INSECURITY TO THE INNOCENT CUSTOMERS OF THE BANK OR, THE Government to Fund such . more
Feb 21
Whose problem is it? The bankers? or the borrowers? If the banker saw these risks, he must have demanded the margin or refused the LC.
Why is there a collective urge to project the whole issue as a cheat by the borrower when there has been scant disregard to due diligence from the bankers? If there is easy money coming in, why should there be a hesitation to take risks? more
Why is there a collective urge to project the whole issue as a cheat by the borrower when there has been scant disregard to due diligence from the bankers? If there is easy money coming in, why should there be a hesitation to take risks? more
Feb 22
