PNB Scam: US “Can’t Confirm” if Nirav Modi is in the Country
The Punjab National Bank is at the centre of a $1.8 billion fraud – one of the largest to be detected across the Indian banking sector.
The Punjab National Bank is at the centre of a $1.8 billion fraud – one of the largest to be detected across the Indian banking sector.(Photo Courtesy: niravmodi.com)

PNB Scam: US “Can’t Confirm” if Nirav Modi is in the Country

NEWEST FIRSTOLDEST FIRST
(3) NEW UPDATES
KEY EVENT

Banks for Raising Cover Against Fraud by Staff

Rattled by a spate of frauds in the banking sector, lenders are now planning to increase insurance cover against delinquencies by their employees to protect their bottomlines.

"Frauds of such magnitude and scale – PNB fraud of Rs 11,400 crore and OBC of fraud Rs 390 crore – has forced us to consider substantially much higher risk cover than the basic banker's indemnity policy which various banks have right now," a top public-sector bank official told PTI.

For example, SBI alone in 2016-17 reported frauds of Rs 2,424.74 crore (837 cases). Out of this, an amount of Rs 2,360.37 crore (278 cases) represents advances declared as frauds.

However, the official said that cover can be for fraud not for the wilful default where number of lenders are involved, and these two have to be dealt separately.

The official said, for example, the cases of Winsome Diamond Group and Nirav Modi are completely different, and the legal treatment and provision for both are diverse.

KEY EVENT

PNB Maybe Asked to Pay Banks for Bank Fraud

The Finance Ministry may be planning to order Punjab National Bank to compensate other lenders for losses arising out of the Rs 11,400 crore fraud, BloombergQuint reported quoting a source familiar with the matter.

Allahabad Bank, Axis Bank and UCO Bank were the ones to be affected by Nirav Modi’s fraudulent transactions. All the transactions found valid would have to be honoured by the PNB, but if the fault lies with the paying bank then the amount would be apportioned accordingly, the source said.

The Finance Ministry has also asked all state-run lenders to review their systems to eliminate possibilities of a loophole.

KEY EVENT

Lawyer Says He Will Advise Nirav Modi Not to Return to India for Investigation

Vijay Aggarwal – Nirav Modi’s lawyer – told BloombergQuint that the case against his client wouldn’t last for “even five minutes” in court.

Aggarwal said PNB’s claim of lacking records of the LoUs could be easily refuted.

To say it is not in the books of the bank is an incorrect statement, absurd, which is not going to stand for even five minutes in the court of law.
Vijay Aggarwal, Nirav Modi’s lawyer

Aggarwal said that although he would advise Modi to appear for the trial, it was best for him stay away from investigations because the “atmosphere was not conducive.”

Earlier, without revealing his client’s whereabouts, Aggarwal had told PTI, “Everybody is saying that Nirav Modi has run away. Why would anyone flee leaving assets worth Rs 5,000 to 6,000 crore for the Enforcement Directorate to recover?”

Also Read : PNB Scam: Passports of Modi, Choksi Revoked; ED Expands Probe

In what is touted to be the biggest bank fraud to hit India till date, jeweller Nirav Modi of carrying out fraudulent transactions worth Rs 11,400 crore via the Punjab National Bank (PNB).

India’s second largest state-owned lender has alleged that Modi and the companies linked to him colluded with its officials to get letters of undertaking (LoU) to help fund buyers’ credit from other overseas banks. The passports of Modi and his uncle, Mehul Choksi, have been revoked. Both accused reportedly fled India before the complaints were registered.

Snapshotclose

  • 12 have been arrested in the Nirav Modi-Punjab National Bank case so far
  • Over 10 PNB officials, including the bank’s executive directors, were questioned by CBI
  • On 1 March, ED attached 41 properties worth Rs 1,217.2 crore belonging to Mehul Choksi group
  • LoU documents were recovered from a small room in a chawl in Mumbai’s Wadala

(The Quint is now available on Telegram and WhatsApp. For handpicked stories every day, subscribe to our Telegram and WhatsApp channels)

KEY EVENT

ED to Seek Info From Over Dozen Countries on Nirav Modi, Choksi's Assets

Widening its probe into the PNB fraud case, the Enforcement Directorate will soon send judicial requests to over a dozen countries for obtaining information about the overseas businesses and assets of diamantaire Nirav Modi and owner of Gitanjali Gems Mehul Choksi.

Official sources told PTI that the agency would approach a competent court in Mumbai with a request to obtain letters rogatory (LRs) to be sent to around 17 countries where the central investigation agency has traced the footsteps of the diamond and gold jewellery businesses of the firms owned by Modi, his uncle Choksi and others associated with them.

The countries where the LRs would be sent include Belgium, Hong Kong, Switzerland, the United States, the United Kingdom, Dubai, Singapore, and South Africa.

KEY EVENT

Why is 'Chowkidar' Silent: Rahul Targets Modi on PNB Fraud

Continuing to target the prime minister in his campaign in poll-bound Karnataka, Congress president Rahul Gandhi on Sunday, 25 February, asked why Narendra Modi, who had described himself as the country's "chowkidar,” was “silent” on the PNB fraud.

He also asked Modi why he was not taking any action against the alleged sudden increase in turnover of a company owned by BJP president Amit Shah's son, Jay Shah.

"Modiji comes to Karnataka and speaks about corruption. He had told the country not to make him prime minister but a chowkidar (watchman) of the country," Gandhi said at rallies in Vijapura and Bagalkote districts in north Karnataka.

KEY EVENT

CBI Raids Mumbai Office of Cyril Amarchand Mangaldas

The Mumbai office of law firm Cyril Amarchand Mangaldas was raided by a CBI team last week in connection with the investigation into the Rs 11,400 crore Nirav Modi scam, Legally India reported quoting sources.

As per the report, the firm was involved in a banking assignment but it dropped the assignment as soon as news of the scam broke.

KEY EVENT

All Bank Fraud Cases Registered by CBI Being Investigated

Investigations are under way in all bank fraud cases registered by the CBI recently. Director of the CBI has directed the investigation in-charge officials to take complete the investigation within the stipulated time. He has also asked the officers to not to spare anyone found involved.

In the PNB case, three General managers from the bank’s international banking and treasury divisions have been questioned. They are responsible for receiving daily reports on Nostro accounts transactions. The CBI has written to Central Vigilance Officers of five other banks that transacted with the Nostro accounts of PNB.

10 Lookout Circulars have been issued regarding people associated with the scam, over a period of time.

KEY EVENT

Amit Shah Hits Back at Rahul on PNB Fraud Issue

BJP president Amit Shah on Monday took on Congress chief Rahul Gandhi for his attacks on the prime minister over the PNB scam, saying no other government had acted as promptly and taken stringent action against frauds as the Narendra Modi government.

Shah also hit out at the Sidaramaiah government, accusing it of following "'three Ds -- Dhokha (cheating), Dadagiri (goondaism) and dynastic politics".

The BJP chief said the Enforcement Directorate and the CBI have taken prompt action in the case.

"There has been no government other than Modiji's government, that has taken prompt and most stringent of actions against any frauds committed in the past," Shah told reporters.

His reply came when he was asked about Gandhi's remarks against Modi in the multi-crore PNB fraud case.

PMLA Court Accepts ED's Plea to Issue Letter Rogatory to Six Countries

A PMLA court has accepted the Enforcement Directorate’s plea seeking issuance of Letters Rogatory (LRs) for obtaining information about the overseas businesses and assets of diamantaire Nirav Modi.

"It is an application for issuance of LR under the Prevention of Money Laundering Act (PMLA) for recovery/seizure of proceeds of crime and collection of documents, evidence lying in Hongkong, USA, UK, UAE, South Africa and Singapore which are required in connection with the investigation," the ED said in its plea before the PMLA court.

"Certain part of the proceeds of crime involved in money laundering are reasonably believed to be parked in (countries abroad)," the application said.

Letters Rogatory are a request from a court of a sovereign nation to a court of another sovereign nation.

SBI Hopes to Get Its Dues Back

SBI Chairman Rajnish Kumar on Monday said he expects PNB to clear the bank's USD 212 million (Rs 1,360 crore) dues in the Nirav Modi case.

"I am very much confident that things will get sorted out between PNB and other banks," Kumar said in an interview to CNBC TV18.

"As far as our exposure is concerned on PNB, that number is very much confirmed, calculated and advised to PNB," Kumar said.

He said the exposure of SBI to Gitanjali Gems - one of the companies involved in the scam - has also been crystallised and there was no issue on that.

Chidambaram Hits Out at BJP Over PNB Scam

Former finance minister P Chidambaram hit out at the BJP government over the PNB scam, accusing them of colluding with the likes of Nirav Modi and Lalit Modi.

Where is the money? Finance Minister said I will find money. You can find money only by raising taxes. Or is there some hidden source of income we don’t know about? Are the Lalit Modis and Nirav Modis promised you money?

Additional Rs 1,251 Cr Fraud Revealed, PNB Shares Plunge

Punjab National Bank (PNB) has informed the CBI that a further scam of Rs 1,251 crores has been detected in respect to Gitanjali Gems. The CBI is now probing Rs 12,636 crore which is (Nirav and Gitanjali) PNB scam, up from Rs 11,421 crore.

The shares value of the bank extended losses to fall as much as 14.2 percent in biggest percentage loss since January 2009. The value was down by 12.9 percent in the afternoon trade, as the markets closed for the day.

PNB Ex-MD Questioned

Usha Ananth, former Managing Director of the Punjab National Bank has been questioned in Mumbai in connection with the scam.

Two serving GMs have also been called for questioning, reported ANI.

NS Kannan, executive director ICICI bank has also been questioned. He is the leader of consortium of the bank that lent money of Gitanjali Group.

PNB Appoints New Chief Risk Officer

Punjab National Bank appoints A.K. Pradhan as Group Chief Risk Officer.

Mumbai Court Issues Summons to NiMo

A Mumbai Court has issued summons to Nirav Modi to appear on 12th March, failing which the Court may issue a Non-Bailable Warrant (NBW) against him, reported ANI.

Nirav Modi Refuses to Join Investigation, CBI Demands That He Does

Following Nirav Modi’s refusal to join the CBI investigation or reveal his location, CBI replied to his email asking him to immediately write to the MEA disclosing his location so that his return to India can be facilitated. CBI has demanded that he join the investigation next week.

Chief Internal Auditor of PNB Sent to CBI Custody

Special CBI court sent Chief Internal Auditor MK Sharma of Punjab National Bank's Brady House Branch in Mumbai to CBI custody till 13 March.The arrested auditor MK Sharma was allegedly responsible for auditing the systems and practices of PNB in his branch.

Look Out Notice Issued Against Nirav Modi, Mehul Choksi

According to IT sources, a Look Out Notice/Blue Corner Notice has been issued against Nirav Modi and Mehul Choksi separately by the Bureau of Immigration in New Delhi, on request of the IT Department. The notice would be valid for one year from the date of issue i.e 22 February 2018, at all ports of embarkation.

Four more properties of Nirav Modi group have also been attached. These include a farm house at Alibag worth Rs 13 crore and a 5.24 MW Solar Power Plant with 135 acres of land at Karjat, Ahmednagar worth Rs 70 crore as per the books, reported ANI quoting IT sources.

Thirty four more bank accounts/FDs of the Gitanjali group with a balance of Rs 1.45 crore have been attached too.

Blue Corner Notice Issued Against Nirav Modi, Choksi

A Blue Corner notice was issued on Wednesday, 28 February against diamond jeweller Nirav Modi and his uncle Mehul Choksi of Gitanjali Group in connection with the Rs 12,600-crore Punjab National Bank (PNB) fraud case, reported IANS.

An Income Tax department official said the Blue Corner notice - to locate, identify or obtain information on a person of interest in a criminal investigation - was issued by the Bureau of Immigration against the two which will be valid for a year starting 22 February at all ports of embarkation.

Nirav Modi Gives PNB a 'Repay Plan'

Billioinaire jeweller Nirav Modi has given a repay plan to Punjab National Bank (PNB) offering it jewellery worth Rs 2,000 crore, current account deposits amounting to Rs 200 crore and immoveable properties of Rs 50 crore to settle of his liabilities, reported Hindustan Times.

Reportedly, Modi wrote a letter to PNB on 26 February 26 saying the communication was in response to the bank’s letter asking to provide an implementable and concrete plan to return his dues.

ED Attaches Rs 1,217 crore assets of Choksi

The Enforcement Directorate (ED) on Thursday, 1 March said it has attached 41 properties, valued at over 1,217.2 crore, in connection with its money laundering probe in the PNB scam against Gitanjali Gems and its promoter Mehul Choksi.

The attached assets include 15 flats and 17 office premises in Mumbai, a mall in Kolkata, a four-acre farm house in Alibaug and 231-acres of land at locations like Nashik, Nagpur, Panvel and Villupuram in Tamil Nadu.

A 170-acre park in Hyderabad's Ranga Reddy district valued at over Rs 500 crore has also been attached, it said.

Four flats in Borivali (east) area of the Maharashtra capital and nine others in Kheni Tower in Santacruz (east) have also been attached as part of the action.

The individuals and companies, the agency order said, who own these assets include Mehul Choksi, Rohan Parth, Gitanjali Exports Corporation, Gitanjali Gems Limited, Decent Securities and Finance Pvt Ltd, N&J Finstock Pvt Ltd and Rohan Mercantile Pvt Ltd among others.

ED Examines PNB MD

The Enforcement Directorate (ED) on Thursday, 1 March examined Punjab National Bank's Managing Director and CEO Sunil Mehta at its zonal office in Mumbai.

The ED had early this week examined state-owned bank's Executive Director K V Brahmaji Rao to understand how the alleged fraud was detected and other banking procedures.

Nirav Modi's Important Documents Related to LoUs Recovered From Mumbai Chawl

Searches were conducted at two locations on the night of 28 February, based on questioning of certain people. Important documents related to Letter of Undertakings were recovered from a small room in a chawl in Mumbai's Wadala, reported ANI quoting CBI sources.

KEY EVENT

Police Arrest Retired Staff of Brady House Branch

The CBI on Thursday, 1 March arrested Chief Manager, Internal Chief Auditor (retd) Shri Bishnubrata Mishra, who was responsible for concurrent audit for the period 2011-2015 at PNB Brady House branch, reported ANI.

He was reportedly responsible for auditing the procedures and practices followed in branch.

KEY EVENT

PNB Gets New Executive Director

Punjab National Bank appointed Lingam Venkata Prabhakar as the Executive Director for a period of three years on Thursday, 1 March.

Prabhakar's appointment follows retirement of Ram S Sangapure who demitted the office of the Executive Director on 28 February, after attaining the age of superannuation, PNB said in a regulatory filing.

KEY EVENT

US Won't Confirm Reports of Nirav Modi Being in the Country

At a time when India is expecting assistance from the US in tracing Nirav Modi, a State Department official has said that they are unable to confirm if he is in the country. “We are aware of recent media reports that Nirav Modi is in the United States but cannot confirm them,” the spokesperson told PTI.

When asked specifically about whether India can get help from the department in hunting down Modi, the spokesperson said, “We refer you to the Department of Justice for questions on legal assistance to the Indian authorities in relation to their investigation of Modi.”

However, the Department of Justice has refused to comment on the issue.

PNB's Internal Auditor Remanded to 14 Days CBI Custody

Punjab National Bank's Internal Chief Auditor (Retd) Bishnubrata Mishra remanded to CBI custody till 14th March by a court in Mumbai.

Mishra was arrested by CBI yesterday.

Follow our India section for more stories.

    Also Watch