Three accused, believed to be key figures in Rs11,400 crore Punjab National Bank fraud by Nirav Modi, have been remanded to police custody till 3 March
Mumbai: The Central Bureau of Investigation (CBI) on Saturday morning arrested three accused in the Rs11,400 crore bank fraud at public sector lender Punjab National Bank (PNB). All three have been remanded to police custody for 14 days till 3 March.
The arrested include Gokulnath Shetty, retired deputy manager of PNB, Manoj Kharat, another PNB employee and Hemant Bhat, authorised signatory of the Nirav Modi group of firms, according to the CBI remand copy.
The CBI special court ruled that offence against the three is serious and CBI should be given fair chance to investigate the offence which has consequences for the Indian economy. The CBI in the remand copy said initial examination of the Letter of Undertaking (LoUs) indicate that Rs280 crore of fraud could go beyond Rs6,000 crore.
The remand copy also said that it cannot rule out involvement and connivance of more bank officials and private persons. It also hinted that some documents pertaining to LoUs were missing.
During the initial interrogation, Kharat admitted that many bank officials were verifying the LoUs through fraudulent SWIFT messages and this had happened before, CBI said in the remand copy.
CBI was seeking the remand of the three to recover missing documents pertaining to fraudulent LoUs and to understand the extent and magnitude of conspiracy.
“CBI is currently examining the role of 6 more PNB officials and conducted search in the Punjab National Bank’s branch at Brady House Fort, Mumbai, which seems to be the centre of alleged scam," said a CBI official declining to be named.
The bank officials are alleged to have issued fake LoUs to overseas branches of Indian banks based on which the overseas bank branches released funds to the suppliers of Nirav Modi firms and his associate Mehul Choksi of Gitanjali Gems Ltd.
The arrest comes after the federal investigator registered a second case against two PNB officials and others of the Gitanjali Gems group in relation to the fraud. On 31 January, CBI had filed a case against these PNB official and billionaire diamond merchant, Nirav Modi, his wife Ami, brother Nishal and Mehul Choksi.
The CBI FIR alleged that Shetty and Karat in connivance with accused companies defrauded PNB to the tune of Rs4,886.72 crore. “The fraud was done in matter of issuance of unauthorised and fraudulent Letters of Undertaking in favour of foreign branches of Indian based banks and purported Foreign Letters of Credits in favour of foreign suppliers of accused companies," it added.
On Friday, eight other PNB employees were suspended. The number of suspended employees now stands at 18, which also includes general manager level officers. Internal investigation of the bank is still underway.
Meanwhile, the Enforcement Directorate continued its searches across India in the Nirav Modi case and seized Rs25 crore of precious stones and metals. Total seizure in the case now stands at Rs5,674 crore.
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