Movement in the Jellewery landscape with Nira Modi's tourbillon
The luxury world has witnessed quite the ruckus lately. It was indeed revealed in February by the Indian state-run Punjab National Bank that the famous diamond merchant Nirav Modi had defaulted on loans for an amount exceeding US$ 2 billion. Nirav Modi, presenting himself as the "new Cartier of India", also owner of the eponymous luxury jewelry brand, was able to defraud banks by using the cooperation of his uncle and business partner Mehul Choksi. They did so by successfully raising loans from overseas branches of Indian lenders.
Although they both denied any wrongdoing, they left India as early as January, before the fraud was even exposed. Indian authorities offered on February 16 to both businessmen to respond in court to the allegations that they were facing, which were ignored within the stipulated amount of time (one week). As such, their passports were revoked on the February 23, and Modi’s luxury company had to file for bankruptcy in a New York court in February.
It is now believed that Modi is currently staying in Hong Kong, leading to the request of indian authorities in favor of his extradition by the mainland Chinese government. However, Beijing expressed through Chinese Foreign Ministry spokesman Geng Shuang that: “According to the one country, two systems (policy) and basic law of the HK SAR of China, under the assistance and authorisation of the Central government, the HK SAR can make arrangements on judicial mutual assistance with other countries”.
As such, it seems that Beijing is open to the idea of deporting Modi to India but might use the situation as a bargaining tool. The following weeks will surely be able to tell us how this tricky political affair unravels.
One can only wonder what will happen to the luxury stores that the brand acquired at over priced conditions in premium locations in Hong Kong, Macau, London or New York, as well as their entire staff that are bound to look for new horizons. The biggest takeaway in this ordeal is how greatly the cards will be reshuffled in the hands of the biggest luxury players, especially in the Asia-Pacific region.