THE CENTRAL Bureau of Investigation (CBI) has arrested nine persons in connection with an alleged fraud that it claims is “similar” to the case involving diamantaires Nirav Modi and Mehul Choksi. The fraud, to the tune of Rs 9.09 crore, was allegedly carried out with the help of fraudulent Letters of Undertaking (LoU).
Three officials of the Punjab National Bank (PNB) and two directors of a private company were arrested by the CBI on Monday. The arrests also pertain to the allegedly fraudulent LoU of Rs 9.09 crore issued at Brady House branch in Fort area of south Mumbai, the same branch where the earlier offences were reported from.
Sanjay Prasad, the 58-year-old assistant general manager, PNB, Amar Jadhav (29) and Sagar Sawant (31), who are both single-window operators at the bank and Aditya Ishwardas Rasiwasia (38) and Ishwardas Agarwal (73), directors of Chandri Paper and Allied Product Pvt Ltd, were arrested on Tuesday and sent to CBI’s custody till December 21.
Four more arrests were made on Tuesday – Bechhu Tiwari, the then chief manager at the Forex department of PNB, Yashwant Joshi, scale II manager at PNB’s Forex department, Praful Sawant, scale I officer handling the bank’s exports section and auditor M K Sharma, chief manager rank (scale IV officer at PNB). Sources said more arrests are likely to follow.
Special Public Prosecutor Om Prakash, while seeking the custody of the five arrested on Monday, claimed that the bank officials had, without obtaining the required request application, documents and approval of the authorities, and without making entries in the bank system, transmitted to overseas bank, causing benefit to the accused directors.
The CBI, in its remand application, claimed that the two directors were instrumental in getting fraudulent alteration of import documents through which they managed to get fraudulent LoUs issued in 2016-17 “without any underlying business transactions”.
Lawyer Subodh Desai, representing the two directors, told the court that the FIR in this case had been filed in March and since then, the two had been to the CBI office “15-20 times” and cooperated with the probe. “The entire monies due to the PNB were paid by them, acknowledged by the PNB and the fact has been intimated to the CBI. Their custodial interrogation is not necessary,” Desai said.
About Prasad’s role, the CBI claimed that he was responsible for the overall “functioning and supervision” of the branch and had failed to ensure compliance of circulars issued by PNB on such transactions.
Lawyer Niranjan Mundargi, representing Prasad, said he was an AGM in the branch for 11 months and that his job profile did not require him to look into each and every transaction at the branch. He added that he has been assisting the investigators of the CBI in the earlier transactions at the branch and his statement had also been recorded in the previous cases. Another lawyer representing Sawant said that while he was suspended, pertaining to the Gitanjali Gems (Choksi case) incident, he was reinstated subsequently by the bank. The CBI claimed that custodial interrogation was necessary as original documents of the LoU were yet to be found.
The accused, however, said that the CBI had already conducted searches in their homes. The CBI also claimed that the accused have to be questioned on whether there was any “quid pro quo” to the public servants to facilitate the commission of the offence.
Special Judge J C Jagdale agreed with the contention of the CBI that custodial interrogation was necessary.
“Gokulnath Shetty and Manoj Kharat will be quizzed in the case. Shetty is one of the main accused. Like in the Nirav Modi and Mehul Choksi case, in this case, too, he helped the firm bag the fraudulent LoU based on which the loans were availed,” said a source requesting anonymity. CBI’s FIR filed in March was against Shetty and Kharat, the two directors, and the company.