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Nirav Modi firms availed of loans from PNB's HK, Dubai branches too: Report

The 162-page report alleged that a group of employees at the Brady House branch issued fake letters of undertaking over several years to help diamantaire Nirav Modi and his uncle Mehul Choksi

Press Trust of India  |  New Delhi 

Nirav Modi
File photo of Nirav Modi

group's exposure was not limited to only PNB's Brady House branch in Mumbai, as the firms had availed loan facility from its Hong Kong and branches too, according to an internal report of the submitted to investigative agencies.

As per the report, group Firestar Hong Kong and availed some credit facilities from the Hong Kong and branches of (PNB) as well.

The sanctioned credit facilities to both the were recalled soon after investigation and linkage with the group which defrauded the of about Rs 140 billion.

"As per the investigation finding there is no reporting of any trail of fraudulent transaction of other Group accounts where fraud has been detected or reported with these two accounts. As such, these two accounts are not treated as fraud," the report said.

Another group firm, the US-based Firestar Diamond Inc filed for bankruptcy under Chapter 11 in the in last week of February soon after the multi-crore fraud was unearthed by the bank.

also joined the bankruptcy proceedings as it apprehended that a major part of the fraud money was routed to the US-based firm.

The 162-page report alleged that a group of employees at the Brady House branch issued fake letters of undertaking over several years to help diamantaire Nirav Modi and his uncle raise billions of dollars in foreign credit, leading to the country's biggest-ever

The report was presented along with internal e-mails as part of the evidence to investigative agencies.

The bank reported a loss of Rs 134.16 billion for the January-March period as against standalone profit of Rs 2.61 billion in the fourth quarter of the preceding fiscal, 2016-17.

With regards to the provision made for the loss incurred on account of Nirav Modi fraud, the bank provided Rs 71.78 billion, 50 per cent of the total amount of Rs 143.56 billion in the fourth quarter of 2017-18. The remaining amount will be covered in the three quarters of the current fiscal year.

paid Rs 65.86 billion to other banks to discharge its liabilities towards Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with (Core Banking Solution).

First Published: Wed, June 27 2018. 13:42 IST
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