PNB documents to CBI show only three suppliers were ‘paid on 3 firms of Mehul Choksi’

The CBI, which is now investigating the fraud in PNB, has registered two FIRs — one against Nirav Modi and his companies, and other against his uncle Choksi and his companies. While Modi is being probed for an alleged loss of over Rs 6,000 crore caused to the second biggest state-owned lender, Choksi is being investigated for alleged fraud of over Rs 6,100 crore.

“The International Division of PNB has shared details on the three exporters to whom loans were raised through LoUs on behalf of the three firms connected to Choksi,” said an official privy to the probe details. “We are now probing if these were genuine imports bills. This would be corroborated with the import bills and concerned documents recently seized by us from a law firm which was raided last week,” said the official.

“The other leg of the probe will concentrate if these three suppliers are genuine or if they were fictitious companies floated for the purpose of round tripping,” he said. The CBI plans to approach the Customs soon. “We would be asking the Customs to help us verify if the imports bills are genuine. While this will help us verify if the entries are genuine, the question on whether the alleged ‘suppliers’ actually provided the materials as mentioned in the import bills to Choki’s firms is tough to probe as only 10 per cent of the total consignment handled by Customs is subjected to checking on random basis. Information provided by Customs would be crucial to our investigation to the probe,” the official said.

The CBI’s FIR on Choksi said that “The funds raised through the said LoUs were meant to be used for payment of Import Bills of the accused companies, whereas it was dishonestly and fraudulently utilised for discharging the earlier liabilities on account of Buyer’s Credit Facility allowed by the overseas branches of Indian banks.”

The CBI now wants to question Vipul Chatalia, Vice-President of Choksi’s firms. “He was among the first to flee the country after the change in management at the Brady House branch who was not comfortable with the idea of continuing with the practices of arrested accused Gukulnath Shetty (deputy manager of PNB ). We have managed to track him down to a South-east Asian country and he will soon join the probe. He is the crucial link between Choksi and Shetty as it was on Choksi’s order, Chatalia got Shetty to issue the fraudulent LoUs,” said the official.

Detailing Chatalia’s role, the CBI in its remand copy submitted to the special CBI court while seeking the remand of the arrested accused had said that “Shetty claimed that documents were prepared and submitted to him at the instance of Chatalia. It is understood that Shetty was returning the sets of documents without making the entries in their books although the corresponding SWIFT messages were conveyed to the overseas Bank.”

Like the Enforcement Directorate (ED), the CBI too would move the special CBI court for issuance of Letter Rogatory (LR) to foreign countries, mainly Hong Kong, Belgium, Bahrain, Germany and Mauritius. “We have already got replies from the international desks of the five banks namely — Axis Bank, Allahabad Bank, State Bank of India, UCO Bank and Union Bank of India — on information sought on the nostro account held by these banks. By the end of this month, we will write to the court requesting them to issue LRs to the countries linked to the probe,” said the official. A LR is a formal request from a local court to a foreign court seeking assistance in a case.