The Enforcement Directorate has held Shyam Wadhwa, Vice President, Firestar Diamond, marking its first arrest in the $2-billion Nirav Modi fraud case. According to ED sources, Wadhwa played a critical role in setting up the shell companies that were used to obtain unauthorized loans from Punjab National Bank (PNB).

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Firestar Diamond is a company owned by Nirav Modi, the billionaire jeweller at the centre of the fraud case.

Indian authorities have stepped up investigation into the case, including a raid recently of Modi’s former law firm. Modi and his uncle Mehul Choksi, owner of Gitanjali Gems Ltd, are suspected to have colluded with bank officials at PNB to obtain unauthorised loans over a six-year period. PNB has revealed that the amount of those fraudulent transactions could rise by $204 million to nearly $2 billion.

Wadhwa has also been accused of managing capital flow from Letters of Understanding (LoUs) to shell companies.

Separately, the Central Bureau of Investigation has arrested Vipul Ambani, president (finance) of Nirav Modi’s Fire Star Diamond, Kavita Mankikar (executive assistant and authorised signatory of three firms—Diamond R US, Stellar Diamond, Solar Exports), Arjun Patil (senior executive, Firestar Group) and Rajesh Jindal, the then head of the Brady House branch of PNB.

With inputs from agencies.