THE CBI on Saturday questioned the Punjab National Bank’s Chairman and Managing Director Sunil Mehta and Executive Director K V Brahmaji Rao in connection with the alleged Rs 11,400 crore fraud being investigated against Nirav Modi and his uncle Mehul Choksi.
The two top executives of the bank, sources said, were quizzed on the regulatory processes, checks and balances and auditing schedules in place at PNB to monitor its finances and loans, as the CBI looks into involvement of other officials in one of India’s largest bank fraud cases.
The CBI FIR so far names two PNB employees, Gokulnath Shetty and Manoj Kharat, posted at its Brady House branch in Mumbai, over the allegedly fraudulent issue of 293 Letters of Understanding, to Modi and Choksi between 2011 and 2018. Officials point out that it is improbable that a fraud of this proportion could have gone undetected for so long if officers higher up the ranks were not involved.
Sources said the PNB CMD and Executive Director had been questioned regarding this.
On Friday, the CBI also questioned two general manager level and two deputy general manager level officials at the bank.
“A team flew to Mumbai Saturday morning and questioned Mehta and Rao for the whole day during working hours. They are not accused or suspects at the moment,” a CBI officer said.
A bank has multiple levels of auditing, including daily auditing of records, audits carried out every six months or annually, and finally regulatory audits by the Reserve Bank of India. The bank also hires external auditors from time to time.
The CBI, that has seized a trove of documents, is also confronting the accused with facts recovered from the papers.