PNB fraud: probe reaches bank's HQs; ED questioned

An Executive Director and nine other senior officials of PNB were grilled by the CBI today in connection with the Rs 11,400 crore fraudulent guarantees issued by the in favour of nephew-uncle jeweller duo Nirav Modi and Mehul Choksi, officials said.
The Income Tax authorities also raided 20 premises linked to Choksi.
The searches by the Enforcement Directorate continued for the sixth day today, with its chief Karnal Singh even cancelling his scheduled visit to France to attend a meeting of global anti-money laundering agencies so he could personally monitor the probe.
"Assets worth Rs 10 crore were seized during searches at 13 premises linked to Modi and Choksi," an ED official said.

The CBI, on the other hand, questioned eight senior executives of Modi's firms and 10 of the Gitanjali group, an official said.
The CBI probe is led by a Joint Director level officer who is considered an ace investigator of financial crimes, and has handled mammoth financial frauds whose tentacles spread across multiple states.

During the questioning of three PNB officials --Bechhu Tiwari, Yashwant Joshi and Praful Sawant--arrested yesterday, it emerged that they were trying to shift the blame for the fraud on their colleagues--Gokuldas Shetty (retired official) and Manoj Kharat--arrested earlier, officials said.
As part of the multi-agency probe, the I-T department today raided 20 premises linked to Gitanjali Gems promoter Choksi and associated firms in connection with a tax evasion case, official sources said.

They said the searches were conducted in Mumbai, Pune, Surat, Hyderabad, Bengaluru and few other cities against 13 companies linked to Choksi.
A total of 20 premises were raided by a team of over 110 I-T sleuths, the sources said.
The department had recently attached bank accounts and other assets of Choksi and the Gitanjali group.
Choksi, his nephew Modi and others, are being investigated by multiple probe agencies after the fraud came to light following a complaint by the Punjab National Bank. The PNB claimed they cheated the state-run bank of Rs 11,400 crore with the involvement of a few employees of the bank.

The CBI has registered two cases involving Modi and Choksi. These relate to fraudulent issuance of 150 Letters of Undertaking (LoU) (a kind of bank guarantee) worth Rs 6,498 crore and 143 LoUs worth Rs 4,886 crore.
The ED has also registered two separate cases to probe money laundering allegations against Choksi and Modi.
An LoU is a guarantee which is given by the issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to credit giving bank along with accruing interest.