nsucurrent.com May 20, 2018

PNB Misrepresented Factual Position on LoUs to RBI: CBI Charge Sheet

15 May 2018, 10:28 | Nina Perez

PNB scam: CBI files its first charge-sheet

Nirav Modi

Two other PNB executive directors (EDs), K V Brahmaiji Rao and Sanjiv Sharan, were expelled soon after the charge sheet was submitted, the bank said in a filing to the stock exchanges late last night.

Rajeev Kumar, Secretary, Department of Financial Services (DFS), Ministry of Finance on Monday said that they have instructed the directors of the Punjab National Bank (PNB) and the Allahabad bank to divest all the powers of those who are accused in the multi-crore PNB scam.

A CBI official, on the condition of anonymity, revealed that current Allahabad Bank CEO and MD Usha Ananthasubramanian will be charged. A separate charge sheet against Mehul Choksi will be filed later. The chargesheet also made accused three companies namely Diamond R US, Solar exports and Stellar Diamonds of Nirav Modi.

The CBI has also booked former IDBI CMD Kishor Kharat, at present MD and CEO of Indian Bank, in the loan fraud case.

The main accused in the scam - Nirav Modi and his brother Nishal Modi - are absconding.

After the IOB fraud had surfaced, the RBI had issued guidelines and circulars to prevent such frauds in the banks which were allegedly not implemented in PNB in its entirety, they said. The scam pertains to the alleged issuance of fraudulent Letters of Undertakings of more than United States dollars 2 billion to companies of Modi and his uncle Mehul Choksi by the Punjab National Bank's Brady House branch in Mumbai during 2011-17, officials said. It is likely to come up when the CBI files supplementary charge sheets in the case related to the probe into his Gitanjali Group.

The role of bank's former chief Usha Ananthasubramanian has been detailed in the chargesheet.

The CBI filed its first chargesheet in the country's largest financial scam worth over Dollars 2 billion at PNB allegedly committed by billionaire jeweller Nirav Modi.

It is alleged that Modi and Choksi, in connivance with the then PNB deputy manager Gokulnath Shetty, transgressed banking procedures and fraudulently caused PNB "wrongful" loss.

Three FIRs have been filed by CBI in this particular case against Nirav Modi, Mehul Choksi and also against Modi's company Firestar Diamonds between January and March. The fraud was allegedly perpetrated despite the circulars issued by RBI, which was in the knowledge of senior officials of PNB. She was the managing director of PNB till May 5 a year ago.

The bank said that provisions worth Rs 3,120 crore have been made against accounts where stressed asset schemes were under implementation. The amount of Rs 6,498.2 crore is one part of the bigger $2-billion fraud. "We issued notices and sought explantation 10 days back from top officials of these banks", he said.

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