Nirav Modi fraud case: CBI questions PNB general manager S.K. Chand
New Delhi: The CBI on Monday questioned a general manager of Punjab National Bank, who handles the treasury section, in connection with the alleged Rs12,636-crore fraud perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, officials said.
The questioning came a day after the CBI arrested four people—two employees and an auditor of Nirav Modi’s group of companies, and a director of Gitanjali Group of Companies.
“PNB General Manager (Treasury) S.K. Chand is being questioned by the CBI in the bank fraud case,” an agency official said.
It is alleged that Choksi and Modi got Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused officials of PNB did not enter the instructions for these LoUs and in their internal software to avoid scrutiny. They were sent through an international messaging system for banking called SWIFT, which is used to pass instructions among banks globally to transfer funds.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest.
The PNB officials allegedly sent these messages to Indian banks—Canara Bank, State Bank of India, Bank of India, Axis Bank, Allahabad Bank—located in Antwerp, Hong Kong, Bahrain, Mauritius, Frankfurt without making entries in the banking software about the LoUs.
Upon receiving the messages from PNB under SWIFT, the banks abroad transferred these amounts into Nostro account of PNB with them. Nostro account is an account that a bank holds in a foreign currency in another bank to enable foreign trade by its clients.
Meanwhile, a special court in Mumbai on Monday remanded the four people, arrested in the PNB fraud case on Sunday, in the CBI custody till 17 March.
They were produced before special CBI judge S.R. Tamboli.
Manish K. Bosamiya, then AGM (operations) of Firestar International Ltd. owned by Nirav Modi, and then finance manager Miten Anil Pandya were arrested for their alleged role in the preparation of applications for fraudulent Letters of Undertakings (LoUs) submitted to Punjab National Bank.
Auditor Sanjay Rambhia, partner in the Chartered Accountancy firm Sampat and Mehta, Mumbai, and then director of Mehul Choksi’s company Gili India, Aniyath Shiv Raman Nair, were also arrested in connection with the case on Sunday.
It was alleged that besides being one of the directors of the Gitanjali group of companies, Nair was the authorised signatory for the applications submitted to PNB for issuance of LoUs and Foreign Letters of Credit (FLCs).
The CBI lawyer said the agency needed their custody for interrogation and further probe. Meanwhile, the CBI court on Monday remanded six others, arrested in the case in February, in judicial custody till 19 March. Vipul Ambani, president, finance, the Firestar International; Kavita Mankikar, executive assistant and authorised signatory of three firms of Nirav Modi; Arjun Patil, senior executive, Firestar group, were arrested in the case related to the Modi group firms.
Kapil Khandelwal, CFO, Nakshatra group and Gitanjali group and Niten Shahi, manager, Gitanjali group, were arrested in the case related to Choksi’s firms. Rajesh Jindal was a senior PNB official.
All the six were produced before judge S.R. Tamboli after their CBI remand ended on Monday. While Mankikar’s lawyer said she suffered from diabetes, Ambani’s lawyer said he suffered from stomach pain and back pain. The judge, while remanding them in judicial custody, said they should be provided necessary medical help.