CBI’s second chargesheet in PNB fraud case: ‘Gross omission led to criminal misconduct’

Mehul Choksi is shown as a wanted accused in the over 11,000-page chargesheet filed on Wednesday before a Special CBI Court in Mumbai

Written by Rashmi Rajput | Mumbai | Published: May 17, 2018 3:27:58 am
CBI’s 2nd chargesheet in PNB fraud On Monday, the CBI had filed its first chargesheet against diamantaire Nirav Modi, his firms, the four senior bank officials and 17 others for defrauding the state owned bank. (Express photo by Purushottam Sharma/Archives)

In its second chargesheet in the over Rs 7,000-crore fraud in Punjab National Bank (PNB) involving jeweller Mehul Choksi and his three firms — Gitanjali Gems Ltd, Gilli India Ltd and Nakshatra Brand Ltd filed on Wednesday, the Central Bureau of Investigation (CBI) said that there was “gross omission” on the part of the senior bank officials leading to “criminal misconduct” and facilitating the continuation of the fraud at the Brady House branch of the Punjab National Bank (PNB) in South Mumbai.

Mehul Choksi is shown as a wanted accused in the over 11,000-page chargesheet filed on Wednesday before a Special CBI Court in Mumbai. On Monday, the CBI had filed its first chargesheet against diamantaire Nirav Modi, his firms, the four senior bank officials and 17 others for defrauding the state owned bank.

In the chargesheet filed today, the CBI has named Usha Ananthasubramanian, MD & CEO, Allahabad Bank who was earlier the CEO of PNB, two Executive Directors (EDs), PNB- KV Brahmaji Rao and Sanjeev Saran along with 15 others in the alleged Rs 7,080.86 crore fraud in PNB by jeweller Mehul Choksi and his three firms — Gitanjali Gems Ltd, Gilli India Ltd and Nakshatra Brand Ltd. While the total fraud has been pegged at Rs 13,570 crore, the two chargesheets filed by the CBI details the fraud in the bank aggregating a little over Rs.1,000 crore. Wednesday’s chargesheet was restricted to six Letter of Undertakings (LoUs) and six Foreign Letters of Credit (FLCs) which Choksi allegedly fraudulently procured from PNB to raise a loan of Rs 512 crore.

As per the chargesheet, there was negligence on part of the three senior officials though it is silent on whether there was any quid-pro-quo. “ On April 3 and 10 and November 25, 2016 after three instances of fraud caused by fraudulent LoUs were reported, the RBI issued confidential circulars to all the banks asking them to go through their Society for Worldwide Interbank Financial Telecommunication (SWIFT), reconcile them with their Core Banking System (CBS) and report by March 15, 2017… In one of the three cases mentioned by RBI, PNB’s Dubai branch had issued buyer’s credit on a fraudulent LoU issued by Indian Overseas Bank, Chandigarh branch… However, PNB never sent any reply on if they had reconciled their systems but instead sent a generic revert stating the SOP followed at the bank… These were confidential circulars sent to CMD which are password protected but the CMD instead of taking cognisance forwarded it to the two EDs and the EDs forwarded to GM, Ahad who then sent the reply to RBI,” the chargesheet said.

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