Nirav Modi, the main accused in the $2-billion Punjab National Bank fraud case, has been denied bail for a second time at Westminster Magistrates Court, despite offering to wear an electronic tag and up to £1 million in security as the prosecution asserted he had “threatened to kill” a witness, and had destroyed evidence in an effort to curtail his case.

While acknowledging “inconsistencies” in the evidence of those making such allegations pointed to by the defence (who had insisted there was no flight risk and that Modi had treated the UK as a “haven” where his case would be “fairly considered’), Chief Magistrate Emma Arbuthnot said she was denying bail because of the risk he would fail to surrender to the court and his “lack of community ties.”

She noted the substantial amount involved in the fraud charges in India, as well as indications that he could seek to move elsewhere – such as his attempt to gain investment-based citizenship on the South Pacific island of Vanuatu.

He is set to appear before the judge by video link on April 26 for a brief hearing, while the prosecution has been set a deadline of May 24 to serve papers. The judge – who at the start of proceedings concurred with the defence’s criticism of the state of the papers – called for “clean documents” to be submitted, with a “proper index” and “proper” pagination.

Arbuthnot and Clare Montgomery, the defence barrister, had expressed their dismay at the state of the paperwork index and numbering submitted to them by India – with Arbuthnot telling the court, in jest, that they had “almost” made her cry.

The interference and threat allegations were one of several arguments presented to the court by barrister Toby Cadman, acting on behalf of the Crown Prosecution Service (which is representing India). He told the court there was a “substantial risk” that Modi would “flee, interfere with witnesses, interfere with evidence in order,” to prevent the case against him proceeding. He rejected defence suggestions that Modi had not travelled anywhere abroad since the allegations had surfaced. “In fact, he travelled to New York in February of this year,” Cadman said.

Cadman also pointed to the resources at Modi’s disposal, which were demonstrated by factors such as his application for an investment programme as a route to citizenship in the Pacific island of Vanuatu (which was declined by authorities there). “Due to nature of the business he had at his disposal diamonds gold and pearls,” the Court also heard.

Cadman said that while Modi had been in talks to hand himself in voluntarily, he had “not cooperated with authorities in any way.” “Due to the nature and seriousness of these charges, the value and resources available to him, there would be an overwhelming desire to flee the jurisdiction…and he has shown a willingness to interfere in the administration of justice to influence witnesses and destroy evidence,” the court heard.

The extraordinary allegations were levelled during the hearing, at which Cadman alleged that Ashish Lad, a director of Unity Trading FZE, who had given a witness statement to Indian authorities against Modi, had received a phone call from Modi who had threatened to kill him if he provided a witness statement. Lad was also offered ₹2 million to provide a false statement. The prosecution also alleged that mobile phones and a server “critical to the case” had been destroyed at Modi’s behest.

If Modi were released, there was a risk further evidence could be destroyed, he warned. The defence challenged this argument, pointing to alleged inconsistencies in his account, as well as of other witnesses. They also argued that these arguments related to past behaviour and circumstances had moved forward in a way that meant such concerns were no longer relevant.

Montgomery – the barrister who had represented Vijay Mallya – insisted that Modi had the same right to bail as someone in a domestic case, even given the magnitude of the amounts involved, as was the case in many high-value fraud cases. “the type of person who is generally caught up in that sort of allegation does not have a long history of criminal conduct…they do not have underworld connections -they are generally law abiding and that is true for Mr. Modi as it is for many other people,” she told the court.

“The reality is that the size and nature of these allegations is not a safe touchstone by which you can judge if he is liable to flee….” He had even less of an ability than a UK national to flee the UK, she said, and been less desire to do so. “He has remained in the UK since before the allegations were made in India and has not sought to travel since he arrived here,” she told the court.

“He has treated the UK as a haven where his case will be fairly considered,” Montgomery told the court. By contrast his case had acquired a “notoriety” in India and led to allegations that were ‘not justified”. He had been in the UK for “legitimate business purposes” when the problems in India emerged “quite unexpectedly,” she said.

Also in attendance at the hearing were three members of the joint CBI and Enforcement Directorate team – at least one of whom had experience working on the Mallya case.

Sources have confirmed that Modi is in the UK on an investor visa that he obtained before the fraud allegations surfaced and was issued in 2015. The UK investor visa allows those who invest at least £2 million in UK government, shares or businesses, to obtain it a faster route to settlement in the UK. Eighty-two Indian nationals applied for an investor visa through this route between 2008 and March 2018, according to Transparency International.

Last week, things took an unexpected turn as Modi was arrested by police after a tip off by an Indian-origin bank clerk at the Metro Bank branch in Holborn in central London who recognised him following the wave of publicity around the case.. Modi’s legal team had been in touch with the Metropolitan Police’s extradition unit, and there had been plans for him to hand himself over voluntarily by appointment this week.

 

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