The uncovering of one of the biggest frauds at a state-owned bank in India has rocked the country’s financial sector and brought scrutiny to a billionaire jeweler who counted Hollywood stars among his customers.

The nearly $1.8 billion fraud reported at India’s second-largest state-owned bank is a blow to the government’s efforts to revive the state-owned banking sector, which is already staggering under a mountain of bad debt.

Nirav Modi, whose jewelry boutiques span high-end streets from Hong Kong to London to New York and whose diamonds have been worn by Hollywood stars such as Dakota Johnson and Kate Winslet, is being investigated for the fraudulent transactions. His brand ambassador is Bollywood star Priyanka Chopra, who has also carved a niche in the United States.

The fraud, which officials say had been going on from a single branch of Punjab National Bank in Mumbai, went undetected since 2011. Calling it a “cancer,” the bank’s chief executive, Sunil Mehta, told a news conference earlier this week that it had been removed. “We will resolve it and we will honor all our bona fide commitments.”

Officials at the bank have accused Modi and his companies of obtaining unauthorized letters of undertaking from junior employees to secure credit from overseas branches of Indian banks. 

Modi has not responded to the allegations and, according to some reports, left the country last month. His home, stores and offices were raided by Indian investigators. His passport is being revoked, according to the Law and Justice Minister, Ravi Shankar Prasad.

“No one will be spared,” he said. “The taxpayers’ money will not be allowed to be lost. The investigation is proceeding with great speed and pace.”

Modi, whose worth is estimated at about $1.74 billion, is the 85th richest man in India, according to Forbes. Belonging to a family of diamond traders, the soft-spoken businessman founded a company called Firestone Diamond in 1999 — later rechristened Firestar Diamond — and quickly made a name in the business. He later set up his own jewelry design brand and won the rich and famous among his customers.

In January, he attended the economic summit in Davos, where a large Indian business delegation was present, along with Prime Minister Narendra Modi. The two are not related. 

The fraud, which went undetected for years, has reignited concerns about governance standards at Indian banks and norms that are used for lending to corporate customers. Questions have been raised as to why audits failed to detect the fraud for years.

It came to light weeks after the government announced a $14 billion bailout for state banks. These banks, which account for about two-thirds of all bank assets in the country, are the backbone of the financial system, but are saddled with bad debt estimated at $147 billion.

Economists have warned that this mountain of bad loans threatens India’s efforts to accelerate its economy as it slows down efforts by banks to lend to potential investors.
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Iraq’s prime minister was in Kuwait this week, selling his country as a promising investment opportunity. After years of war and sectarian violence, Iraq is moving toward stability and wants to attract the private sector to help fund its $88 billion reconstruction and recovery effort. From the Kuwaiti capital, VOA’s Margaret Besheer reports investors are interested.
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Top U.S. and Mexican officials on Thursday expressed cautious optimism that the North American Free Trade Agreement will be renegotiated, speaking ahead of the next round of trade talks later this month.

Asked on local television whether it was more likely the $1.2 trillion trilateral trade pact would survive or die, Mexico’s Foreign Minister Luis Videgaray said there was cause for optimism, though Mexico should be prepared for all eventualities.

“We should be prepared for a future with or without NAFTA,” he said.

In Washington, U.S. Treasury Secretary Steven Mnuchin said it was a priority for the Trump administration to renegotiate NAFTA, declining to speculate on the consequences if the United States withdraws from talks.

The seventh round of negotiations in Mexico City will take place Feb. 25 to March 5, starting and ending a day earlier than initially planned.

There is a “window of opportunity” for concluding the talks in March or April, said Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby.

“That’s the objective,” Kalach told reporters.

Talks to renegotiate the 1994 pact have stalled as Canada and Mexico are at loggerheads with the United States over some of the most contentious proposals its negotiators have put on the table.

“I am cautiously hopeful that [U.S. Trade Representative] Ambassador Lighthizer will be renegotiating this deal,” Mnuchin told the House Ways and Means Committee, which has jurisdiction over trade matters in the U.S. Congress.

“It is a major priority of ours,” he added U.S. President Donald Trump has called NAFTA one of the worst deals in history, blaming it for U.S. manufacturing job losses, and has threatened to quit the agreement unless he can rework it to better suit U.S. interests. His remarks have unsettled financial markets.

At the last round in Montreal, Canada made several proposals to address the U.S. insistence on raising the North American content of autos. Washington also wants a clause that would allow any member to withdraw after five years.

The early March deadline for concluding talks has been extended to at least early April, officials have said. But participants have conceded privately it could take months longer.

If talks run past Mexico’s July presidential election, Mexico’s private sector will work with the president-elect to update NAFTA, Kalach said.

The current frontrunner, leftist contender Andres Manuel Lopez Obrador, has said Mexico should suspend talks until after the election.
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Shares in European plane maker Airbus flew higher on Thursday after the company reported improved earnings and was more upbeat about the future following problems to several of its key aircraft programs.

The company said that it surged to a net profit of 1 billion euros ($1.25 billion) in the fourth quarter, from a loss of 816 million euros a year earlier, while revenue was stable around 23.8 billion euros. Airbus delivered a record 718 aircraft last year and expects that figure to rise further in 2018, to 800.

CEO Tom Enders credited “very good operational performance, especially in the last quarter.”

Shares in the company jumped about 10 percent on Thursday in Paris. Investors seem optimistic that the company is putting behind it the worst of its troubles with three airplane production programs.

Airbus, which is based in Toulouse, France, said it took another charge of 1.3 billion euros on its A400 military plane, which has had cost overruns for years. It said, however, that it had reached a deal with the governments that are buying the planes on a new delivery schedule that should rein in any new charges on the program.

The company also acknowledged that it had had more struggles with engines supplied by Pratt & Whitney for the A320neo, a narrow-body plane that’s popular with regional airlines. The supplier had had problems with the engines last year, which it fixed, but reported a new issue more recently that could affect 2018 deliveries, Airbus said.

Another of Airbus’ troubled plane models, the A380 superjumbo jet, now has a more stable outlook after the company reached a deal with Emirates airline that will cover the cost of production for years.

The various problems with these production programs risked overshadowing what was otherwise a strong year for Airbus in terms of earnings, as global demand for commercial aircraft grows. Airbus raised its dividend by 11 percent and said it expects one of its key earnings metrics — earnings before interest and tax — to rise 20 percent in 2018.

 
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Until recently, Javier, a 60-year-old line cook, couldn’t afford a smartphone.

Now, thanks to a Silicon Valley company, Javier has a Galaxy S8, one of Samsung’s high-end smartphones. Javier said he relies on it for everything.

Once a month, he walks into a mobile phone store near San Francisco and makes a cash payment. If he didn’t, the phone would be remotely locked. No YouTube, no Skype calls, no Facebook. He has never missed a payment.

WATCH: Pay-As-You-Go Smartphone Gives the Poor Access to Better Technology

Smartphones out of many people’s reach

Around the world, people rely more and more on their smartphones for connecting to the internet, and yet for many, the device is still cost prohibitive. For the roughly 1 in 10 American consumers without financial identities — no banking history or credit scores — it is difficult to get smartphones on one of the low-cost payment plans offered by the major carriers.

Javier, who declined to give his last name because he is an undocumented immigrant, is on his third phone from PayJoy, a company founded by former Google employees. PayJoy offers a pay-as-you-go model for the smartphone market aimed particularly at customers with little or bad credit histories.

“We work with immigrants from all over the world coming to the U.S., and we work with Americans who are just outside the financial system,” said Doug Ricket, PayJoy’s chief executive, who worked in the pay-as-you-go solar industry in Africa. “They can afford $10 a week, and they can get a great smartphone. And for PayJoy, we say, ‘Welcome to the 21st century and get all the modern apps.’”

A new way to figure out a person’s credit risk

PayJoy figures out a person’s risk differently than most companies. A customer provides a Facebook profile, a phone number and some sort of official government ID. PayJoy decides the person’s risk level before offering him or her credit for a phone. Then, a customer picks a payment plan and makes a down payment. PayJoy’s research has found that a Facebook profile can be useful in establishing a person’s identity.

“We’re starting from this pool of people who have no traditional credit score and we’re saying for most of them, we can actually find something that the credit agencies are not finding,” Ricket said.

No payment means no YouTube

If a customer doesn’t pay by 5 p.m. the day payment is due, PayJoy remotely locks the phone. A customer can only make emergency calls or call PayJoy’s customer service. The customer can see that friends are texting or messaging on Facebook, but cannot open the phone to read the messages.

“Now, when we look internationally, we see more people going from a flip phone to smartphones, and people upgrading from a really basic level to one that can handle Facebook, maps and Instagram,” Ricket said.

If customers stop paying, they can return the phone without penalty. But if they do pay off the phone, they can qualify for an even better one. PayJoy makes its money by charging monthly interest — as high as 50 percent in some cases — on the retail price of the phone.

Expanding into Africa, Asia and India

The company is operating in the United States and Mexico and has plans to expand into Kenya, Tanzania, southeast Asia and India. So far, PayJoy offers only smartphones running Android, the operating system created by Google, but Ricket hopes to offer iPhones one day.

PayJoy’s vision is to be not just a smartphone firm, but a financing company, offering customers a way to use their phones as collateral to pay off televisions and other household goods.

“Once the customer gets the smartphone, they can potentially use that smartphone either by buying the smartphone with PayJoy or just collateralize an existing smartphone to finance a TV or a sofa,” Ricket said.

If PayJoy takes off, people in emerging markets may be able to upgrade their phone choices, and have a new way to finance their purchases.
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A key to any successful business is to provide customers with what they want. For automakers at the 2018 Chicago Auto Show, they say their customers want sport utility vehicles, or SUVs.

“2017 was a record year for Ford SUV sales,” said Dan Jones, Ford’s SUV communications manager for North America. “We sold almost 800,000 SUVs in the year alone. We are actually growing our SUV portfolio 25 percent in the last four years. So, all the signs are there that the Ford SUV portfolio is really booming, and we’re going to capitalize and ride that wave.”

Ford isn’t alone.

“Trucks, SUVs and crossovers — we have grown 15 percent,” said Tiago Castro, Nissan’s director of trucks and commercial vehicles.

His company’s Rogue SUV promotional tie-in with Disney’s Star Wars film franchise comes at a time when the model, with versions equipped with some self-driving features, is one of Nissan’s best-selling vehicles overall.

“Over 400,000 units last year for the Rogue lineup,” Castro said.

High gas prices and poor fuel economy contributed to the dramatic decline of SUV sales in the United States in the mid-2000s. At the time, those customers buying new vehicles opted for smaller, more fuel-efficient sedans, including vehicles with new electric motors and technology.

But today, SUVs dominate the American automobile market, which is easy to see on the floor of the 2018 Chicago Auto Show, billed as the nation’s largest auto show.

“The SUV segment is incredibly hot,” said Trevor Dorchies, product manager for Jeep and Dodge, two brands under the Chrysler/Fiat company with a variety of options in the medium and large-size SUV ranges — which weren’t just on display at the Chicago Auto Show. Potential customers have an opportunity to ride in them on an indoor obstacle course that demonstrates their performance in challenging terrain.

“I think gas prices, where they are at right now, have helped Jeep and Grand Cherokee and Durango sales,” Dorchies said. Gas prices in many parts of the United States remain below $3 a gallon (79 U.S. cents per liter). 

“Cheap gasoline means folks want to get a bigger SUV,” he said.

But aside from affordable fuel prices, today’s offerings are a far cry from the gas-guzzling SUVs of the past.

“One thing that has really changed in the last few years is the competitiveness of fuel economy of SUVs compared to cars,” explained Ford’s Jones. “So, people aren’t seeing a huge warp now, in terms of MPG improvement or a range improvement in a car to an SUV. It’s less of a compromise. So, people are liking the high seating position, more space, the utility to go off road.”

Overall, sedan sales are down in the U.S. by more than 30 percent for some manufacturers as customers flock to SUVs.

But Jones said evolving needs and taste factor as much for customers as gas prices.

“The millennials, the biggest cohort of consumers, were coming to the age where they were having children, starting to have a little more money, wanting to have a higher seating position, preferring all-wheel drive. So, SUVs have really just taken off.”

Jones said he doesn’t see the SUV trend cooling off for Ford either.

“We think 2018 should be another record year for us,” he said.

While automakers retool and shift production lines to keep up with increased SUV demand, the National Automobile Dealers Association predicts overall new vehicle sales for 2018 will trend slightly downward.
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Is that love in the air or french fries? White Castle, KFC and other fast-food restaurants are trying to lure sweethearts for Valentine’s Day.

It’s an attempt to capture a bit of the $3.7 billion that the National Retail Federation expects Americans to spend on a night out for the holiday. Restaurant analyst John Gordon at Pacific Management Consulting Group says it appeals to people who don’t want to splurge on a pricier restaurant. And some customers enjoy it ironically.

White Castle, which has been offering Valentine’s Day reservations for nearly 30 years, expects to surpass the 28,000 people it served last year. Diners at the chain known for its sliders get tableside service and can sip on its limited chocolate and strawberry smoothie. KFC is handing out scratch-and-sniff Valentine’s Day cards that give off a fried chicken aroma to diners who buy its $10 Chicken Share meals or a bucket full of Popcorn Nuggets.

Panera Bread wants couples to get engaged at its cafes; those who do can win food for their weddings from the soup and bread chain. And Wingstop sold out of its $25 Valentine’s Day kit, which came with a gift card and a heart-shaped box to fill with chicken wings. The company says 1,000 of the kits were gone in 72 hours.
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The U.S. on Wednesday reported its biggest increase in consumer prices in a year, pushing stocks lower in early trading.

The consumer price index, which follows the costs of household goods and services, advanced by a half percentage point in January, up from two-tenths of a point in December.

The January increase pushed the year-over-year inflation rate up by 2.1 percent. It was the same 12-month rate recorded in December, increasing fears among investors that firming inflation, along with increasing wages paid to American workers, could lead policymakers at the country’s central bank, the Federal Reserve, to boost interest rates at a faster pace.

The Labor Department said consumer prices, minus the volatile changes in food and energy costs, rose three-tenths of a percentage point in January, the largest increase since January 2017. Analysts had been expecting an increase of 0.2 percent.

Stock indexes were lower at the start of Wednesday, with the key Dow Jones industrial average falling about a third of a percentage point after a string of recent days with massive swings between losses and gains.
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Electric powered bicycles, known as “e-bikes,” are a common sight among New York’s immigrant delivery workers, who consider the bikes a necessity to make a living wage. The problem is, they’re illegal to operate in the city, creating a dilemma for these immigrants who feel they have no alternative employment options. VOA’s Ramon Taylor and Ye Yuan report.
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