MumbairThe Enforcement Directorate Thursday conducted multiple searches in connection with a Rs 280 crore money laundering case against billionaire jewellery designer Nirav Modi and others following a complaint by Punjab National Bank.
Official sources said the agency sleuths swooped down on at least ten premises of entities involved in the case early morning.
The premises raided by the ED here include Modi’s residence in Kurla, his jewellery boutique in Kala Ghoda area, three company locations in Bandra and Lower Parel, three premises in Surat in Gujarat and Modi’s showrooms in Chanakyapuri and Defence Colony in Delhi.
The ED had filed a case under the Prevention of Money Laundering Act (PMLA) after going through a CBI FIR registered early this month.
It is understood that the ED also went through the PNB complaint that was made out against Modi and others.
The agency, they said, would probe if the allegedly defrauded bank funds were laundered and these proceeds of crime were subsequently used by the accused to create illegal assets and black money.
The CBI had booked Modi, his brother, wife and a business partner for allegedly cheating PNB of over Rs 280.70 crore in 2017.
The CBI had also raided the residence of Modi, his brother Nishal, wife Ami and Mehul Chinubhai Choksi, all partners of Diamond R US, Solar Exports and Stellar Diamonds and two bank officials — Gokulnath Shetty (now retired) and Manoj Kharat, who were also named in the FIR as accused.
Modi (46), who had figured in the Forbes’ list of richest Indians, was booked by the CBI for cheating after PNB sent a complaint to it alleging that the jewellery firm owner, his brother, wife and Choksi entered into a criminal conspiracy with the officials of the bank and cheated it, causing a “wrongful loss”.
“The public servants committed abuse of official position to cause pecuniary advantage to Diamond R US, Solar Exports, Stellar Diamonds and a wrongful loss of Rs 280.70 crore to Punjab National Bank during 2017,” the CBI FIR has alleged.
The bank had also alleged in the complaint that a fraudulent issuance of Letters of Undertakings (LOU) took place on January 16, 2018 for and on behalf of the accused firms, which approached the bank and presented a set of import documents to the branch with a request to allow buyers’ credit for making payment to overseas suppliers.
Yesterday, the CBI received two fresh complaints from PNB allegedly against Modi and a jewellery company alleging fraudulent transactions worth about Rs 11,400 crore.
Will take full capacity action against guilty: PNB
The Punjab National Bank (PNB) on Thursday said it will take “full-capacity” action against the wrong doers in the Rs 11,400-crore Nirav Modi fraud case, which started in 2011.
The state-owned bank said it had detected USD 1.77 billion fraud in which billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from one its branches for overseas credit from other Indian lenders.
PNB has suspended 10 officers over the scam and referred the matter to the CBI for investigations. The Enforcement Directorate is continuing raids at various places associated with the well-known jewellery designer.
PNB CMD Sunil Mehta told reporters that the bank detected the fraud and has referred the matter to the law enforcement agencies.
“In the last 123 years, we have seen many ups and down.
The bank at its full capacity will take every action to book wrongdoers.
“This fraud had started in 2011. Our own bank detected first and told the law enforcement agencies about this. PNB is fully committed to its clean banking policy. That is why we are the first one to detect and report this to the various law enforcement agencies,” he said.
Mehta tried to assure stakeholders saying that it was a standalone incident confined to a single branch in Mumbai. He also said all other branches of the bank have been scanned to check any fraudulent activity.
The PNB CMD further said the bank has informed all its lenders about case.
“We have issued advisory as well to them. We were the first to inform SEBI about this under the disclosure norms. So all these things are as per our clean banking agenda,” Mehta added.
He further said the government was monitoring the case on day-to-day basis. “The bank has the capability and capacity to come out of this situation.”
The top PNB official, however, refrained from providing details as the investigations were going on.
He asserted that action will be taken against all those involved, irrespective of their seniority.
Mehta further said the bank will honour all its bonafide commitments. “We want to convey to all our stakeholders that PNB is pursuing clean banking agenda as a responsible bank.”
PNB shares continued to bleed for the second day in a row, ending with a steep loss of 12 per cent at Rs 128.35 apiece on BSE. (PTI)
Par panel seeks report from Fin Ministry over PNB fraud
A parliamentary panel on Thursday questioned the finance ministry officials about the USD 1.77 billion fraud in the state-owned Punjab National Bank (PNB) and asked them to submit a report on it.
The Parliamentary Standing Committee on Finance, which met to deliberate upon the demands for grant, on Thursday asked the ministry officials including Secretary Financial Services Rajiv Kumar that how can the tax payers’ money be used for recapitalising the bank which is not well managed.
“Members expressed their concern over such large scale fraud in the PNB and questioned the recapitalisation process of the state-run banks when they are not well managed and tax payers money is leaking,” a member who was present in the meeting said.
The committee is headed by senior Congress leader Veerappa Moily and former prime minister Manmohan Singh is also member.
“The committee has asked the finance ministry officials to submit a report before the panel on this fraud,” another member who was present in the meeting told PTI.
In what could be the biggest banking fraud in India, state-owned PNB had on Wednesday said it detected a USD 1.77 billion (about Rs 11,400 crore) scam in which billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders.
PNB has suspended 10 officers and referred the matter to CBI for investigation.
While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
An LOU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers. Foreign bank branches too are under investigation.
Last week, PNB had lodged an FIR with the CBI stating that fraudulent LoUs worth Rs 280.7 crore were first issued on January 16. At the time, PNB had said it was digging into records to examine the magnitude of the fraud.
In the complaint, PNB had named three diamond firms — Diamonds R Us, Solar Exports and Stellar Diamonds — saying they had approached it on January 16 with a request for buyers’ credit for making payment to overseas suppliers. PTI
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