Nirav Modi, Mehul Choksi allegedly got Letters of Undertaking (LoUs) and foreign letters of credit (FLCs) of $2 billion issued in favour of foreign branches of Indian banks based on fraudulent claims. Photo: Abhijit Bhatlekar/ Mint
Nirav Modi, Mehul Choksi allegedly got Letters of Undertaking (LoUs) and foreign letters of credit (FLCs) of $2 billion issued in favour of foreign branches of Indian banks based on fraudulent claims. Photo: Abhijit Bhatlekar/ Mint

PNB scam: CBI to soon file charge sheet against 19 arrested

The CBI is all set to file a charge sheet against 19 people arrested in the over Rs13,000 crore Punjab National Bank (PNB ) scam case, which allegedly involves Nirav Modi, Mehul Choksi

New Delhi: The CBI is all set to file a charge sheet against 19 people arrested in the over Rs13,000 crore Punjab National Bank scam case, which allegedly involves billionaire jewellers Nirav Modi and Mehul Choksi, officials said on Wednesday.

The agency has to file the charge sheet within 90 days of the arrest, they said, adding that the Central Bureau of Investigation (CBI) is likely to meet the deadline.

The probe against those absconding, such as Modi, Choksi and their relatives, is still on, and the agency may take time to finalise their roles in the case, they said.

The probe is vast but the roles of those arrested will be summed up in the charge sheet, the officials said.

The agency has arrested 19 people, including PNB officials and top honchos of the firms of Modi and Choksi and Modi in connection with the case.

The CBI arrested former PNB deputy manager Gokulnath Shetty, single window manager Manoj Kharat, and Hemant Bhat, the authorised signatory of Modi’s firms, the officials said.

Vipul Ambani, the president (finance) of Modi’s Fire Star Diamond along with executive assistant Kavita Mankikar and senior executive Arjun Patil, CFO of Nakshatra group and Gitanjali group, Kapil Khandelwal and the manager of Gitanjali group Niten Shahi were also taken into custody by the CBI in February, besides others, they said.

Choksi and Modi allegedly got Letters of Undertaking(LoUs) and foreign letters of credit (FLCs) of $2 billion issued in favour of foreign branches of Indian banks based on fraudulent claims.

The accused PNB officials allegedly did not enter the instructions for these LoUs 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 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 the 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.

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