Why Diamond Dealers Stopped Dealing With Nirav Modi?

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Why Diamond Dealers Stopped Dealing With Nirav Modi?

A few of India’s top jewelers said they ceased their deals with Nirav Modi and Mehul Choksi’s firms. Modi and Choksi are the two main accused of the Punjab National Bank (PNB) fraud. In Gujarat, the Jain and the Patel communities dominate the diamond cutting and polishing business. These communities have an unwritten code of business ethics where the deals are done informally.

In Gujarat, most of the diamond business is carried out informally; funding and goods are lent without paperwork. Modi and Choksi’s diamond business fall under the Jain community from Gujarat. The duo had a reputation for not paying their dues on time.

The Chairman of Venus Jewels Seventilal Shah said he stopped dealing with the duo a few years ago. Shah said, “Nirav Modi and Gitanjali’s business model wasn’t convincing to us.” Shah further added, “If they take goods on two months credit and there is one month’s delay it is fine. But if it is regular episodes of delays, then there is something wrong. That was the case with these guys.”

A renowned Surat based diamond exporter said, “Mehul did not understand the importance of trust.” The exporter was quoted saying, “Once we sold him polished diamonds and we had to chase him for payment almost every month for six months. Every time he used to give some excuse, then we decided to stop doing business with him altogether.” Furthermore, eight other renowned traders in Surat also complained of facing such issues with Modi and Choksi.


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