CBI questions PNB MD, Director in bank fraud

CBI questions PNB MD, Director in bank fraud

The lender has alleged the firm, Dwarka Das Seth International, cheated the bank with the help of some of its officials, using letters of credit (LCs) - a loan instrument similar to those used by Modi's and Choksi's firms in the alleged fraud. The executives of Nirav Modi's uncle Mehul Choksi's companies, including Kapil Khandelwal (CFO of Nakshatra group and Gitanjali group), and Niten Shahi (manager of Gitanjali group) have also been arrested by the CBI. Since they had no pre-arranged credit limit, the branch official asked the companies to put down the full amount as collateral so that the bank could issue the Letters of Undertaking (LoUs) to authorize the credit. According to some estimates, total losses of these public sector banks could well swell up to over Rs 20,000 crore if the ED finds out "bending of norms" in their cases too.

"When Nirav Modi left India, at that time it was reported that some hours prior to PM's announcement of demonetisation, 90 crore rupees of cash was brought in one of the branches of PNB & were exchanged for billions or something. After [Deputy Manager] Gokulnath Shetty's retirement on January 1, Modi and Choksi, along with their families, fled the country the same week".

Meanwhile, Modi, his wife Ami, and Choksi have been summoned by the Enforcement Directorate (ED) to appear at its zonal office in Mumbai tomorrow. Its action comes in the wake of its ongoing probe - along with the CBI - against the two and many others including directors of their companies and bank officials into the alleged bank fraud, the IANS report said. If the accused skip the summons, the agency may approach a special PMLA (Prevention of Money Laundering Act) court to get non-bailable warrants against them.

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The Mumbai office of Cyril Amarchand Mangaldas was raided by a Central Bureau of Investigation (CBI) team last week in connection with the Punjab National Bank scam triggered by Nirav Modi. "This has been done before we write to court for issuing LRs to countries like Hong Kong, Belgium, Dubai, Bahrain where these branches are located", said an official. The ED had earlier seized bank deposits, shares and luxury cars worth over Rs 100 crore belonging to the businessman and his group.

The Indian Government on Saturday revoked the passports of celebrity jeweller Nirav Modi and Mehul Choksi, key accused in Rs 11,400 crore Punjab National Bank scam.

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