Home > Industry > Banking > Fraud-hit PNB alleges it has been defrauded again

Scandal-hit Indian lender Punjab National Bank alleged it has been cheated -- its third complaint since 2018 when it suffered through a $2 billion blow.

The state-run bank filed a complaint in October alleging that Jagdish Khattar, founder of Carnation Auto India Pvt., a vehicle repair and servicing company, cheated the bank of 1.1 billion rupees ($15.4 million), according to a copy of the complaint posted on the Central Bureau of Investigation’s website.

Punjab National, battling a surge in bad debt, had reported an alleged fraudulent transaction in July as well. In the latest complaint, the lender alleged that Khattar, a former managing director of Maruti Suzuki India Ltd., the nation’s biggest carmaker, colluded with some bank officials to cheat Punjab National.

“Carnation is a bonafide business failure," Khattar said in a text message. “There is no wrongdoing. A detailed forensic audit was conducted earlier this year by a leading independent auditor and nothing amiss was found."

The lender has categorized Carnation’s account as a bad loan with effect from June 30, 2012, according to the complaint. The fraud-hit bank’s gross bad loan ratio rose to 16.8% as of September from 16.5% at June.

Punjab National Bank “has now referred it to CBI as a part of the process followed by them," Khattar said. “Search was conducted by CBI but nothing incriminating was found. We will be vindicated once the investigation is completed."

A unit of Mahindra & Mahindra Ltd., India’s biggest maker of SUVs, bought the main assets of Carnation last year, excluding liabilities.

The embattled lender disclosed a 38-billion-rupee fraud against Bhushan Power & Steel Ltd. in July, roughly one year after a massive fraud at the bank that was allegedly perpetrated by jeweler-to-the-stars Nirav Modi.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaper Livemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout