The Bharatiya Janata Party (BJP) on Friday alleged that the Punjab National Bank (PNB) bank fraud, involving jewellers Nirav Modi and Mehul Choksi, had its origins in 2013, during the Congress-led UPA regime.
The Congress released more documents to accuse the Prime Minister’s Office (PMO), and union ministries and central probe agencies, of inaction when the fraud had been brought to their notice by whistle-blowers in 2015. It said Bengaluru resident Hari Prasad SV, who had written to the PMO in July 2016 about the fraud, wasn’t the first whistle-blower in the case.
Union cabinet minister for Human Resource Development and BJP leader Prakash Javadekar released a letter of November 2013 written by Dinesh Dubey, a government nominee on the Allahabad Bank board, to the then finance secretary, where Dubey had pointed to his dissent at Choksi and Nirav Modi being given loans having been overruled. Javadekar said Dubey was later forced to quit.
“It is shocking how a whistle-blower was forced to resign. Who forced him?” Javadekar asked. The union minister said the examples of scams were those that took place during UPA years — 2G spectrum allocation, coal block allocation, Commonwealth Games scam, alleged land deals of Robert Vadra. The union minister alleged that days after Dubey’s letter, Congress president Rahul Gandhi had attended an exhibition hosted by Nirav Modi in New Delhi’s Imperial Hotel.
Javadekar said the bank fraud cannot be equated with UPA era scams. “These cannot be equated with a banking level fraud taking place in connivance with unscrupulous professionals,” Javadekar said. He said the difference between UPA era scams and this one was that earlier ones happened under signed documents by the then prime minister Manmohan Singh. “This is a fraud at the Bank’s level. The government has acted swiftly by suspending Nirav Modi’s passport, and seizing properties worth more than Rs 51 billion as soon as the matter came to its notice,” Javadekar said.
Congress spokesperson Randeep Singh Surjewala said two other individuals had alerted the PMO, Enforcement Directorate, Ministry of Corporation Affairs, Mumbai Police, Securities and Exchange Board of India (Sebi) and Ahmedabad police’s Economic Offences Wing (EOW) of the fraud and the possibility of Choksi leaving the country.
The Congress party released documents that show Vaibhav Khuraniya, who claimed to have been defrauded, had written to the PMO, and other ministries and probe agencies in May 2015. Digvijaysinh Jadeja, who had also alleged being defrauded by Choksi, filed an affidavit in the Gujarat High Court in 2016. In May 2017, Khuraniya had complained to the Sebi.
Surjewala said that not just the PNB, the fraud covers 16 other banks. According to a document the Congress party released, the 17 banks have loaned, both fund based and non-fund based, of Rs 25.54 billion (Rs 2,554.15 crore). A Gujarat based Congress leader alleged the fraud was kept under wraps in view of the Gujarat assembly polls, that took place in December, 2017.
The Congress also disputed Law Minister Ravi Shankar Prasad’s claim that Prime Minister Narendra Modi doesn’t know Choksi. The Congress party released a video of the PM’s speech at the launch of the gold monetisation scheme in November 2015, which Choksi had not only attended but whose presence the PM had acknowledged in his speech.
Surjewala demanded the PM to break his “vow of silence” on the issue. “How is it possible that the four-stage audit of the banking system failed to detect the fraud, especially when a rating agency had flagged its concerns about one of Choksi’s companies?” Surjewala asked. The Congress spokesperson said the needle of suspicion squarely pointed at the PM.
To BJP’s criticism of the Congress calling former IPL commissioner Lalit Modi as “chhota Modi one” and Nirav Modi as “small Modi two” as an insult to the PM, Surjewala asked, “It flummoxes me that only those with the surname ‘Modi’ are defrauding the banking system and escaping the country? BJP leadership should enlighten us.”
Surjewala said the quantum of the scam wasn’t Rs 114 billion (Rs 11,400 crore), but much more. Surjewala said apart from the PNB being defrauded of Rs 11.4 billion, the exposure of the entire fraud involves 30 banks in loans extended to four companies — Firestar International Private Limited, Firestar Diamond Fze, Gitanjali Gems Limited and Gitanjali Exports Corporation — to the tune of Rs 91 billion (Rs 9,906 crore).
“In addition, the PNB stock has depreciated eroding Rs 70 billion (Rs 7,000 crore) in value. Incidentally, the government owns 57 per cent shares in PNB and the remaining is owned by financial institutions/common investors. If you add the erosion of value of Rs 70 billion, total exposure comes to Rs 283 billion (28,306 crore).
Surjewala said that in addition to this, exposure of banks to three more companies that is Diamonds RUS, Solar Exports and Stellar Diamonds, is yet to be disclosed by the banks and the government. “Experts estimate this exposure to be in the range of Rs 30 billion to Rs 50 billion (Rs 3,000/Rs.5000 crore). This will further enhance the total figure of the scam,” he said.
The Congress party also demanded how central probe agencies managed to reach the valuation of Rs 51 billion (Rs 5,100 crore) of the jewellery they had purportedly seized from premises owned by Nirav Modi in raids on Thursday. While the Youth Congress held protests in Delhi and elsewhere on the issue, the Congress party said it would take the issue to the streets in due course as several layers were to unravel in the case.