CBI questions PNB's ex-MD, ICICI official; ED files NBW for Nirav Modi

The Central Bureau of Investigation (CBI) widened its probe by examining top bankers of the country in the Punjab National Bank (PNB) fraud case, which could go up by another Rs 13 billion. This is in addition to fraudulent transactions made through letters of undertaking (LoUs) to the tune of Rs 114 billion earlier, taking the size of the fraud to Rs 127 billion.

According to a CBI official, ICICI Bank Executive Director N S Kannan and former PNB Managing Director and Chief Executive Officer Usha Ananthasubramanian, who currently heads Allahabad Bank, were questioned on Tuesday.

ICICI Bank was the lead lender to at least three entities belonging to Mehul Choksi’s Gitanjali group, while PNB has been the major lender to four other Choksi entities and had significant exposure to Nirav Modi’s firms.

In a statement, ICICI Bank said, "We are fully cooperating with the investigating agencies in their efforts." It also added that it was a working capital lender to Gitanjali group along with other banks in the consortium, but was not the largest lender. It also added that it did not have exposure to Modi's firms, and had neither issued any LoU nor did it have buyer’s credit exposure in Modi and Gitanjali companies.

CBI sources said the agency was examining the working loan facility of Rs 52 billion sanctioned by ICICI bank-led consortium to the Gitanjali group firms. Documents showed that PNB had approved Rs 5.87 billion to the company, while ICICI Bank had sanctioned Rs 4.05 billion.

The probe agency is examining the utilisation of money taken as working capital by Gitanjali Gems and other group companies and whether these banks had given additional loans.

CBI had quizzed two-dozen employees of PNB including its top brass in last one week including MD and CEO Sunil Mehta and executive director KV Brahmaji Rao.  

Besides, two serving general managers--Nehal Ahad and Vimlesh Kumar are also being examined. CBI claims that though both of them were receiving daily reports of the bank’s nostro accounts, they failed to raise a red flag over the huge debit and credit being made through LoUs.

Meanwhile, the Enforcement Directorate (ED) moved special court on Tuesday seeking non-bailable warrant against Nirav Modi under the Prevention of Money Laundering Act (PMLA), since he failed to appear and depose before the agency despite being summoned thrice. The court will hear the matter on Wednesday.

ED also filed another application with the court and sought approval for issuing Letter Rogatory (LR) to seven more countries including – Malaysia, Armenia, Japan, China, Russia and Belgium.

On Tuesday, the ED had got the court’s permission to issue LR to six countries for judicial assistance of foreign authority to identify Modi’s foreign assets.

The ED counsel during the hearing informed the court that Modi had sent an e-mail to the enforcement agency twice earlier stating several reasons for his not being able to depose before the agency. The reasons included his being away on a business trip, that the issue had been sensationalised by media and he was concerned about the political statements.