CBI arrests three more PNB officers in Rs 11,400 crore-fraud case

PNB on Monday said it will honour all its "bonafide commitments" under the Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) in connection with the colossal banking fraud.

By: Express Web Desk | New Delhi | Updated: February 19, 2018 9:57:09 pm
CBI sleuths at Punjab National Bank’s south Mumbai branch on Monday. (Express photo/Ganesh Shirsekar) CBI sleuths at Punjab National Bank’s south Mumbai branch on Monday. (Express photo/Ganesh Shirsekar)

The CBI on Monday held three more officers of Punjab National Bank’s Brady House branch in Mumbai in connection with the Rs 11,400 crore fraud allegedly involving diamond czar Nirav Modi. The total number of arrests in the case stands at six. Searches at PNB Brady house branch have concluded this late evening.

The arrested officers are identified as Bechhu Tiwari (Chief Manager, in charge of Forex dept), Yashwant Joshi (Scale II, Manager, Forex dept) and Praful Sawant (Scale I, Officer, Export).

In a statement, the CBI said that searches have begun at the residences of the arrested officials located at Navi Mumbai, Andheri, Dombivili. It also said searches are going on at office of Nirav Modi group offices at Peninsula Business Park, Lower Parel.

Divulging details of the arrested officers, the CBI said, “Bechhu Tiwari is responsible for supervising the work of Gokulnath Shetty and his manager to ensure entry of authorised swift messages only from the system; He had full knowledge of the activities of Gokulnath Shetty.”

“Yashwant Joshi is responsible for supervising Gokulnath Shetty and ensure daily reports of swift and CBS entries. He had full knowledge of the activities of Gokulnath Shetty but took no action. Praful Sawant is responsible for checking the SWIFT messages daily and report,” it added.

Meanwhile, the Enforcement Directorate (ED) raids entered its fifth day on Monday, with the team holding searches at the Mumbai residence of diamond merchant Nirav Modi.

Sources in the agency said ED sleuths raided Modi’s Samudra Mahal bungalow in Worli in south Mumbai, besides conducting searches at 34 other locations in various cities, including Mumbai, Pune, Aurangabad, Thane, Kolkata, Delhi, Lucknow, Bengaluru and Surat. Diamonds, gold jewellery and other precious stones worth Rs 5,694 crore have been seized till now.

ED director Karnal Singh flew to Mumbai today to review the investigations which are being conducted by a special team of the agency. Sources said officials are trying to collect all financial documents — personal and official — of Modi, his uncle Mehul Choksi, promoter of Gitanjali Gems, and their businesses to take the investigation forward. While the duo has been summoned to assist in the probe later this week, ED officials said there has been no response to the notice yet.

The Income Tax Department, on the other hand, attached seven properties of the Gitanjali Group and Choksi in Mumbai. The department issued an order for provisional attachment of flats and buildings of these entities, which are located in the Opera House, Bandra, Andheri, Wadala and Walkeshwar Road areas of the Maharashtra capital, under the provisions of the Income Tax Act, 1961.

Enforcement Directorate sleuths at Punjab National Bank’s south Mumbai branch on Monday. (Express photo/Ganesh Shirsekar) CBI officials on Monday sealed the PNB branch in Mumbai, where the fraudulent transactions had allegedly taken place. (Express photo/Ganesh Shirsekar)

I-T sources said while four of these attached assets were in the name of Gitanjali Gems Limited, two were in the name of Mehul Chinubhai Choksi and one in the name of Gili India Limited. They said the action was taken to “recover outstanding tax demands”.

The Central Vigilance Commission (CVC) became the latest agency to swing into action and intervene in the case today. CVC commissioner K V Chowdary held a meeting with senior PNB and Finance Ministry officials and discussed details of the action initiated till date.

Vipul Ambani, the chief financial officer of Modi’s Fire Star diamond company, was interrogated by the Central Bureau of Investigation (CBI) in the national capital today. CBI sources said Vipul, who is believed to be a relative of late Dhirubhai Ambani, was holding the position for the last three to four years.

The CBI also continued questioning of arrested bank officials — Gokulnath Shetty (retired) and Manoj Kharat, and the signatory of Nirav Modi’s company — to find out the money trail and depth of the alleged scam involving thousands of documents and digital records. Five more officials, including general manager-level officers, were probed, taking the total number of officials facing questioning to 11. The financial transactions of 18 India-based subsidiaries of the Gitanjali group of companies were also examined.

“It is also being investigated as to why Gokulnath Shetty wasn’t promoted in all these years,” ED sources said, as quotes by ANI.

Raids were also conducted at a Nakshatra Showroom in Salt Lake area, Kolkata, on Monday. (Photo: Twitter/ANI) Raids were also conducted at a Nakshatra Showroom in Salt Lake area, Kolkata, on Monday. (Photo: Twitter/ANI)

The ED and the Income Tax department also zeroed in on about 200 dummy or shell companies in India and abroad that were being used to route or receive funds as part of the alleged fraud. It is suspected that the shell firms were being used by the accused to launder money and create “benami” assets in the form of land, gold and precious stones.

Firing yet another salvo at Prime Minister Narendra Modi over his “silence” on the case, Congress president Rahul Gandhi said the entire country was keen to know the “secret behind his silence” and alleged that it screams out loud where his loyalties were.

Meanwhile, PNB on Monday said it will honour all its “bonafide commitments” under the Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) in connection with the colossal banking fraud. LoUs had been used to defraud PNB, the country’s second-largest bank, to the tune of Rs 11,384 crore.

In a notice posted on its website, the bank said: “We will honour all our bonafide commitments under LoUs and FLCs as per law of the land and as per specific existing guidelines of regulator i.e. RBI on LOUs and FLCs.” However, the Reserve Bank said that it had not directed PNB to meet its commitments under the LoU to other banks.

The shares of the bank slumped over 7 per cent, extending its fall for the fourth straight session today. The stock dropped 7.36 per cent to end at Rs 116.40 on BSE. During the day, it plunged 9.59 per cent to its 52-week low of Rs 113.60. On NSE, shares of the company cracked 7.20 per cent to close at Rs 116.50

On the other hand, the shares of Gitanjali Gems also continued to fall for the fourth straight session, plunging 10 per cent as investor sentiment remained muted after the company came under the scanner of various investigating agencies following PNB’s Rs 11,400-crore fraud detection.

The stock tumbled 9.99 per cent to Rs 33.80 — its lower circuit limit — on BSE.

(With PTI inputs)

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