Rs 130-bn scam: CVC awaits detailed vigilance report; calls PNB auditors

CVC said the auditors have been given time to appear before the body

Awaiting a detailed vigilance report on the over Rs 130-billion Punjab National Bank scam, the Central Vigilance Commission (CVC) on Sunday said it has asked statutory auditors of the bank to appear before it to furnish specific details about financial transactions.

The watchdog asserted the need for strengthening the preventive vigilance mechanism, ensuring procedures were not just routinely followed but that the veracity of reports was verified.

We are also in the process of examining the statutory auditors who had conducted the audit of this bank (PNB). We are looking into the human resource aspect of it, too, Central Vigilance Commissioner K V Chowdary told PTI in an interview.

He said the auditors have been given time to appear before the body.

There are about a dozen of them," he said, pointing out that the audit period spanned several years. "These are Chartered Accountants. We have called them. We have to hear them one by one, Chowdary said.

He said a detailed report has been sought from the Chief Vigilance Officer (CVO) who acts as a distant arm of the Commission to check corruption - of the PNB.

Some interim report has come. But (on) some more issues they have to send (a report). A detailed report is awaited from them, Chowdary said.

He said the CVO has been given some guidance on the issues he has to address in the report.

On the vigilance mechanism in banks, Chowdary said the guidelines and operating procedures had to be strengthened.

He said it had to be ensured that the rules were followed.

In this (PNB scam) case also, there were procedures such as there was a requirement for the manager, the circle office manager, the zonal manager, in a periodic manner, to give certification that they have verified SWIFT messages. That they found them to be correct. But then people have been issuing these reports without actually verifying the correctness of the reports, the chief of the anti-corruption body said.

SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a global messaging network used by financial institutions across the world to securely exchange information and instructions among themselves with the use of assigned codes.

Referring to the PNB scam, he said, either they were routinely sending (the reports) without actual verification or there is a malafide.

Chowdary said it was not clear whether the reports were verified and found not correct but still certified for some extraneous consideration.

So there is a system but the system has been compromised with. (If) the system is compromised then there are some human elements involved in it. We have to fix responsibility on them and take action, he said.

The CVC said if the system was so easily tampered with, it meant it was not robust enough.

It requires to be strengthened more, Chowdary said.

The CBI is among various agencies looking into the over Rs 130-billion fraud allegedly committed by billionaire jeweller Nirav Modi and his uncle, Mehul Choksi, the promoter of Gitanjali Gems.