Four months after news of India's largest-ever banking scandal burst into the headlines when authorities discovered that a series of shell companies tied to a famous Indian jeweler had stolen nearly $2 billion from state-owned banks using an elaborate scheme, the location of the alleged mastermind - who fled with his uncle, also an alleged conspirator, before the fraud was discovered - is coming into focus. Though Indian police have been unable to track him down, Nirav Modi, an Indian jeweller known for building an international luxury brand, is reportedly in London, where he is trying to claim asylum from what he claims is a political persecution.


Nirav Modi

His presence - along with that of beverage baron Vijay Mallya - has the potential to complicate the relationship between the UK and India, as both men are seeking refuge from the Indian government in London, where Modi's company has one store, according to the Financial Times.

The case is the latest complicated diplomatic mess inherited by the UK's Home Office not long after Russian businessman and Chelsea Football Club owner Roman Abramovich withdrew his application to renew his British visa after it was delayed.

As one senior UK foreign official told the FT: "There are always a number of complicated cases that add a little tension and spice to our relationship with India."

"But there is also an appreciation from both sides that we have a legal process that has to be gone through and that we are of course governed by human rights legislation."

The scandal rattled investors faith in India's largely state-owned banking sector, and raised questions about how the fraud wasn't detected years earlier. India's banks have largely spurned the SWIFT network for international interbank payments, which purportedly made uncovering the fraud more difficult.

What most people outside India don't realize is that Modi is one of the country's most visible businessmen, who launched one of the country's few truly international brands, by selling his luxurious, western-style jewelry in India, London, New York and Hong Kong.

The news that Modi and his uncle, Mehul Choksi, were likely behind the country's largest-ever bank fraud, shocked and surprised many. What was more surprising was the elaborate nature of the scheme. The two men worked bank insiders to help them use shell companies and fake letters of guarantee generated by Punjab National Bank to solicit loans from foreign branches of other Indian state-owned banks. The scheme, which went on for years, allegedly netted the conspirators $1.8 billion. The news, which broke back in February, sent shares of India's largely state-owned and controlled banks spiraling lower.

Both men reportedly left India in late January - just before the scandal broke, and Choksi's location is still unknown. Meanwhile, an Indian court has issued warrants for the arrest of both men. Police have also shuttered Modi's shops in India and seized jewellery from his stores, frozen his Indian bank accounts, and impounded his cars, including a Rolls-Royce and a Porsche. Still, India's foreign affairs ministry confirmed to the FT that it hasn't yet asked the UK for an extradition - instead, it's waiting to hear from the country's law enforcement agencies, which are "pursuing the case."