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The Central Bureau of Investigation (CBI) has arrested two former and current officials of Punjab National bank (PNB), and one executive of Nirav Modi group of companies in the bank’s Rs 114 billion fraud case.
This is the first arrest in one of the biggest scams in the country’s banking history, allegedly premeditated by Nirav Modi and Mehul Choksi, through a clutch of companies they own, in collusion with some PNB officials.
People detained include PNB’s former deputy manager Gokulnath Shetty, bank’s single window operator Manoj Kharat, and Hemant Bhat, who is authorised signatory of the Nirav Modi group firms.
The move follows two first information report (FIR) filed by the central agency against Nirav Modi, it’s relatives, Mehul Choksi, his firms and PNB officials. The FIR was based on the complaints filed by the bank, first in January and second on February 13.
During the probe, CBI alleged loss to PNB was over Rs 48 billion.
The CBI on Friday had also conducted searches in 20 properties in six-cities linked to Mehul Choksi and its group companies. These include Maharashtra (Mumbai and Pune), Gujarat (Surat), Jaipur, Hyderabad, and Coimbatore.
Funds raised through LoUs were meant to be issued for payment of import bills of the accused companies whereas it was dishonestly and fraudulently utilised for discharging the earlier liabilities on account of the buyer's credit facilities allowed by the overseas branches of an Indian bank, it was alleged.
While in case of foreign letters of credit (LC), they were opened initially for smaller amounts by creating purported entries in core banking solution system and sending the relevant LC through SWIFT messages.