The Central Bureau of Investigation (CBI) has arrested 10 persons two Directors of Mumbai-based private firms of fugitive diamantaires Nirav Modi and Mehul Chosksi and eight former officials PNB’s Brady House Branch of Mumbai for misuse of Letters of Undertaking worth Rs 9 crore. The alleged corruption in the PNB’s branch resulted in the over Rs 13,000 crore scam.
On March 9, the agency had filed a case relating to “fraudulent” issuance of LOUs worth Rs 9 crore to Chandri Papers and Allied Products by the PNB’s Brady House branch.
An LoU is a credit facility through which the bank guarantees a customer’s payment obligation of a specified amount to an overseas bank.
The two LoUs were allegedly issued in April, 2017 in favour of SBI, Antwerp, Belgium, sources said.
The company did not pay back the credit availed through the LoUs leading to a loss to the public sector bank.
Retired PNB employee Gokulnath Shetty and a single-window operator (SWO) at the branch, Manoj Kharat, who are facing CBI probe in the Modi-Choksi case, were named by the agency in an FIR.
“The case was registered on the allegations of defrauding of Punjab National Bank, MCB, Brady House to the tune of around USD 1421311.82 (equivalent to Rs.9,09,63,956.48 @ Rs.64 per USD) in the matter of dishonest and fraudulent issuance of two Letters of Undertakings (LoU) aggregating to the said amount, in favour of State Bank of India (SBI), Antwerp, Belgium,” the agency said in a statement.