True to his name, Nirav Modi has gone silent.

The 47-year-old diamond merchant, the biggest trigger to the $1.7-billion fraud at Punjab National Bank (PNB), has landed in New York with his family even as Sunil Mehta, the chairman of PNB, it is reliably learnt, offered to resign to finance minister Arun Jaitley.

In an unrelated incident in Surat, where Modi had factory operations to sort, cut and polish diamonds, workers at the city’s diamond bourse protested outside a PNB branch, saying the bank’s officers should not harass diamond-cutters if they fail to pay their monthly instalments of loans taken from PNB.

“If one big diamond merchant can continue to fleece the bank then we are nothing, our EMIs are less than Rs 1,500. But if we do not pay, or miss one EMI, bank agents land at our doorsteps to threaten us,” says Chander Bhai Suta, a diamond-cutter.

Suta last saw Modi a little over four months ago in Surat, considered the biggest hub for the Indian diamond industry.

Interestingly, Modi made breaking headlines around the time when another Indian diamond merchant, Jatin Mehta, currently holed up in London, got favourable judgments from international courts in Sharjah.

Mehta’s company, Winsome Diamonds and Forever Diamonds, owes Indian banks a whopping Rs 6,800 crore. On paper, he is India’s second biggest corporate defaulter.

But recent judgments have given legitimacy to reasons cited by Mehta as to why he faltered on payments. Mehta, who was once the youngest president of the Gems and Jewellery Export Promotion Council (GJEPC), had said he defaulted on payments to banks because one of his biggest clients suffered a billion-dollar loss in bullion and forex derivatives, and could not pay him.

But Indian investigating agencies claimed Mehta had deliberately not paid the Indian banks and diverted the amount to his own accounts in global tax havens. Now, the court judgments have turned the heat on Indian agencies, notably the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

An expert committee of lawyers and accountants formed by the Sharjah Federal Court to probe charges by the ED and CBI against Mehta has informed the Indian agencies that Mehta’s claim was legitimate. A copy of the Sharjah court order is now available on the website of the Bombay Stock Exchange (BSE). This finding is in response to the letter rogatory sent by the ED to the Sharjah Federal Court.

Coming back to Modi, in Delhi and Mumbai, no one is answering why it took a whopping 41 FIRs for a case to be registered by the CBI and how junior managers of the state-owned PNB continued to give Modi loans – the last tranche was offered as late as February 2017, months after his brother, Nishal Modi, also named in the case, married Isheta, granddaughter of the late Dhirubhai Ambani.

PNB has asked as many as 30 nationalised banks if they offered similar uncovered loans to Modi and his maternal uncle, Mehul Choksi of Gitanjali Gems and Jewellers, also named in the FIR. A fast-track computation is in place and if some banks say they have unpaid loans, the amount could even cross $20 billion.

At the heart of the crisis is the modus operandi of banks offering cash to such businessmen.

Choksi, considered among the most powerful diamond merchants, is known to have walked into Board meetings of banks to demand more cash. An incident of 2013 that came to light soon after the PNB scandal was one involving Choksi and Allahabad Bank, where he managed a Rs 50-crore loan without blinking an eyelid despite dissenting directors who said he must first return the Rs 1,500 crore taken from the bank before seeking more cash.

The dissenting director, Dinesh Dubey, was forced to resign. “Everyone wanted me to go, top officials in the ministry of finance and at Allahabad Bank told me to go,” said Dubey in an interview.

In Mumbai, family members of two PNB officials, deputy manager Gokulnath Shetty and clerk Manoj Kharat, of the Brady House branch went to the CBI office to demand their release. They argued that the junior employees “took decisions only after being told by the seniors who said they had done all the vetting”.

Interestingly, in the $25-billion Indian gems and jewellery market, letters of undertaking (LoUs) are largely issued without any security, thereby enabling companies to withdraw money from international branches of other Indian banks.

An LoU is a guarantee by the issuing bank to the receiving bank and the companies to pay a certain amount of money on a specific date.

Modi and his companies leveraged those LoUs in Hong Kong to secure buyers’ credit from the local branches of Allahabad Bank (estimated to be Rs 2,000-2,200 crore), Union Bank (about Rs 2,000-2,300 crore), Axis Bank (about Rs 2,000 crore) and State Bank of India (Rs 960 crore), among others.

Industry watchers claim the bulk of such LOUs are issued because of the clout diamond merchants show when seeking cash. “Some are married into big, industrial families, some have business plans with the families of top politicians and others claim they have loads of family silver,” says Ashok Merchant, a diamond market analyst.

Modi and Choksi both stand accused of defrauding PNB with the connivance of officials. Before the complaint could be acted upon, Modi and his relatives fled India. It was not immediately clear whether they were tipped off by some influential minister in PM Narendra Modi’s cabinet.

The news rattled the Bharat Diamond Bourse in Mumbai, where members huddled in meetings throughout the day to take stock of the situation, and especially how Modi and Choksi would not be able to extricate themselves from this mess.

Modi, in fact, had proudly tweeted a photograph of his participation at the World Economic Forum in Davos, where he is pictured in a group with the Indian PM. A senior official from the ministry of external affairs told reporters in Delhi that it was a customary photograph and reflects no one’s closeness with PM Modi.

But Nirav Modi is influential, both in India and in the Hoveniersstraat district of sleepy Antwerp, the world’s most famous diamond hub. Modi and other Indians, for over two decades, have dominated the global diamond trade, thereby turning what was once a pre-dominantly Jewish neighbourhood near Antwerp’s central station into a home for Gujaratis from India.

Modi’s men, dressed in Versace and Armani suits, haggle with Hasidic diamond-buyers, synonymous in their long black coats, side curls and skullcaps. He is still considered powerful in Hoveniersstraat, his power lunches – mostly veggies – loved by local Europeans and Jews.

Thanks to people like Modi, the growing Indian population has even turned the street’s celebrated kosher restaurants into numerous curry corners, mostly veggies. There is even an iconic Jain temple, where Modi donates liberally.

Modi was part of the Total Indian Takeover of Antwerp, whose streets were once full of Jews but now boast of loads and loads of Indians from Maharashtra and Gujarat.

Often featuring in glossy magazines for his A-lister parties in Antwerp, London, New York and Paris, Modi even enrolled top actresses and models (Priyanka Chopra and Rosie Huntington Whiteley) as brand ambassadors for his jewellery.

People in Mumbai and Antwerp remember him as the “man who whispered” because of his soft voice. In November, around the time when his troubles with PNB had reached a peak, a boisterous Modi partied at the Four Seasons in Mumbai. His guests, among them actress Sonam Kapoor, were catered to by three-star Michelin chef Massimo Bottura from Italy for a seven-course exclusive meal.

Modi’s flashy lifestyle carried on even as PNB officials wondered how to reclaim the cash.

A Bangalore-based businessman, Hari Prasad, who claimed to have alerted the Prime Minister’s Office (PMO) to the alleged fraud in 2016, said he had entered into a business agreement with Modi and Choksi as a franchisee of their jewellery business in 2012. Prasad invested about Rs 100 million and the two were supposed to underwrite his investment with material worth Rs 250 million. But the diamonds and other gems he expected to receive as part of the agreement did not arrive.

Prasad filed a complaint with the Bengaluru police and then sent complaints to the CBI and PMO, which forwarded the complaint to the Registrar of Companies (RoC). Strangely, the RoC closed the complaint without asking for any evidence.

“I realised Modi and Choksi were very powerful people and they must have lobbied against me at the RoC,” Prasad said.

In a letter to PNB, Modi is believed to have asked for six months to pay Rs 5,000 crore due from him. With his celebrity status now under a cloud, Modi’s troubles have just begun.

(Shantanu Guha Ray’s book Diamonds: The India Story will be published this year by Harper Collins.)