Vipul Ambani, an arrested aide of fugitive billionaire Nirav Modi, knew about the fraudulent and illegal Letters of Undertaking (LoUs) issued by the Punjab National Bank in the Rs 114 billion fraud, CBI officials said on Wednesday.
The LoUs were allegedly signed by Gokulnath Shetty, who retired as Deputy Manager of the bank in May 2017. The CBI and the Enforcement Directorate have launched a major probe and manhunt in one of the biggest financial scams in India that has shaken the country's banking sector.
Ambani was arrested on Tuesday and is being continuously grilled by the Central Bureau of Investigation (CBI) officials in Mumbai.
"Ambani was fully aware of the fraudulent and illegal LoUs issued by Shetty who was a deputy manager at PNB's Brady House branch in Mumbai. (This was being done) in the conspiracy and (under the) guidance of Nirav Modi and other employees of his firm," a senior CBI official told IANS in New Delhi.
The CBI official said the agency during its probe found that Ambani not only visited and met PNB's officials at the Brady House branch but also met other bank officials in Mumbai and New Delhi.
The official also said that they have seized documents during searches at the office of Firestar at Peninsula Business Park in Mumbai's Lower Parel that "prove" that Ambani knew what was being done.
The documents include applications for LoUs made to PNB by the three firms of Nirav Modi -- Diamond R US, Solar Exports and Stellar Diamonds.
The agency officials said Ambani's recorded statements failed to prove that he may not have been looking into the affairs of these firms.
"These documents and circumstances prove his knowledge of fraudulent application for LOUs," the official said.
He said the LoUs were, in fact, being made in the premises of Firestar and that there were "deliberate acts of omission by him by not protesting the issuance of such fraudulent LoUs".
"This led to the continuance of concealment and large-scale fraud in this case on PNB and loss and diversion of thousands of crores of public funds. The facts prove his part in this sinister conspiracy to cheat PNB."
Also arrested in the case are senior executive Arjun Patil and authorised signatory of the diamond merchant Kavita Mankikar, Chief Managing Officer (CFO) of Gitanjali group Kapil Khandelwal and its Manager Niten Shahi on Tuesday.
The CBI also arrested Bechhu B. Tiwari, the PNB's Chief Manager who was in-charge of the Forex Department, Yashwant Joshi, a Scale II Manager in the same department and Praful Sawant, a Scale I Officer in the Exports section.
Last Saturday the CBI arrested three persons, including two retired PNB officials - former DGM Gokulnath Shetty and Single Window Operator Manoj Kharat, besides Hemant Bhatt, another authorised signatory for the Nirav Modi Group.
The officials also said the arrested officials of the Nirav Modi companies were not cooperating with the agency.
The agency also arrested Rajesh Jindal on Tuesday night. He was PNB's Brady House branch manager between 2010 and 2011. Jindal has denied his involvement in the issuance of LOUs to the firms of Modi.