THE CENTRAL Bureau of Investigation (CBI) on Thursday told a special CBI court that Mohindra Kumar Sharma, the Internal Chief Auditor of Punjab National Bank (PNB) with Brady House branch, who has been arrested in connection with the Rs 12,636 loan fraud pulled off by Nirav Modi and Mehul Choksi, failed to verify daily transactions and report irregularities between November 2015 and July 2017.
The CBI has, meanwhile, arrested Bishnubrata Mishra, an Internal Chief Auditor who was responsible for concurrent audit for the 2011-2015 period at the PNB’s Brady House branch. He was responsible for auditing the procedures and practices followed in the branch and report them.
In its remand copy submitted before the court, the CBI stated, “Sharma in conspiracy with other co-accused persons deliberately ignored to point out the issuance of illegal Letter of Undertakings (LoUs) and allowed Gokulnath Shetty (arrested accused) to open LoUs to favour the beneficiary private person i.e Stellar Diamonds , Solar Exports and Diamond R’ US, which resulted in a huge loss to PNB to the tune of Rs 6,498 crores”.
Arguing for Sharma’s custody, CBI counsel A Limosin said, “The LoUs issued were not entered in the Core Banking Solution (CBS) system. As the Internal Chief auditor, he was duty bound to verify daily transactions and should have taken a print out of the messages sent via SWIFT (Society for Worldwide Interbank Financial Telecommunication) and tallied it with the CBS. An internal circular by RBI mandates the same.”
“Due to the lapses on his part, higher authority couldn’t deduct the irregularity,” added Limosin.
The defence counsel, however, contested that Sharma did not have access to the SWIFT messages and, therefore, could not verify the same.
Remanding Sharma to police custody for 13 days, Special CBI judge SR Tamboli observed, “It prima facie appears that it was the duty of the auditor to tally the entries. The offence is with regard to a fraud of Rs 6,500 crore and therefore the Investigation Officer should get a fair chance to investigate the crime, find out the nexus of the accused in connection with the crime. This is not possible without a custodial interrogation. This court has found substance in the reasons given in the application and thereby remands Sharma to police custody until March 13,” Tamboli observed.
“After Shetty joined the Brady House branch in 2010, the auditors failed to keep a check in linking the SWIFT messages to CBS and therefore two of them have been arrested,” said an official who spoke on the condition of anonymity.
The CBI is probing the relevant transactions during the 2008-2017 period.
“Shetty joined the Brady House branch in 2010. The auditors failed to keep a check in linking the SWIFT messages to CBS and, therefore, two of them have been arrested,” said an official.
Sources said that on Saturday when the custodial remand of Shetty and Manoj Kharat (Single Window Operator, Brady House branch) ends, the CBI is likely to press for additional police custody by arresting them in another case. “Code of Criminal Procedure only allows 14 days of police custody in a case which we have exhausted. But since there are two FIRs and Shetty and other arrested PNB officials are common in both cases, we are contemplating to book him in the other case and seek his custody. The decision would be taken at the highest level,” said an official.
(With ENS Delhi)