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PNB fraud: Nirav Modi refuses to join CBI probe citing business engagements

Meanwhile, the CBI has arrested PNB's internal chief auditor M K Sharma-- a chief manager-ranked official-- in connection with the case

Press Trust of India  |  New Delhi 

Nirav Modi
Indian jeweller Nirav Modi poses during the launch of his store in Mumbai | Photo: Reuters

Billionaire has refused to join the investigation in the $2 billion fraud in citing his business engagements, prompting the agency to issue a stern letter on Wednesday asking him to appear before it next week.

Meanwhile, the has arrested PNB's internal chief M K Sharma-- a chief manager-ranked official-- in connection with the case, they said, adding that it is first arrest of any of the

Sharma, a scale-IV officer, was responsible for auditing the systems and practices of the bank's Brady House branch--from Letters of Undertakings (LoUs) were issued-- and report the deficiencies with zonal audit office, they said.

Meanwhile, in a terse letter, the "directed" him to approach the in the country where he is residing so that immediate arrangement can be made for his travel to India, officials said.

The agency has told him that it is mandatory for an accused to join the investigation whenever they are asked to, they said.

He has been asked to appear for questioning next week, they said.

The agency had earlier asked Modi on his official email id to join the investigation related to Rs 126.36 billion scam pertaining to fraudulent issuance of the LoUs and Letters of Credit (LCs) from Brady House branch of PNB in in favour of his and his uncle Mehul Choksi's companies, they said.

In response, Modi refused to join the investigation saying he has businesses abroad because of which he cannot return, they said.

The probe agency officials has said the quantum of the alleged fraud perpetrated in the by billionaire jewellers Modi and Choksi stands close to $2 billion after the teams of the CBI and PNB found fresh LoUs and LCs worth Rs 1,251 crore related to Choksi's Gitanjali group of companies.

The PNB had earlier put the defrauded amount at Rs 114 billion ($1.77 billion).

The LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant a 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.

It is alleged that LoUs and LCs worth close to $2 billion were issued to the companies of uncle-nephew duo of Choksi and Modi from the Brady Road branch of the bank through SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages.

These messages were allegedly not entered in the banking software of the PNB to bypass surveillance.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, March 01 2018. 00:54 IST