Weeks after Punjab National Bank (PNB) was jolted by a Rs 13,578 crore fraud scripted by diamond merchants Nirav Modi and his uncle Mehul Choksi, the CBI has started probing another massive loan fraud of Rs 5,280 crore involving Choksi’s Gitanjali’s group. The loan was given by a consortium of 31 banks led by ICICI Bank.
According to the CBI, the probe is a part of the existing FIR filed against Choksi and his Gitanjali Group but different from the PNB fraud.
CBI sources said that during the searches at the Gitanjali Group of companies, investigative agencies seized crucial documents, including an agreement between Gitanjali and a consortium of 31 banks. The loan was cleared in October 2016, and the agreement was revised in October 2017. The document shows the Mehul Choksi firm utilised the “working capital facility”. As per the agreement, ICICI Bank was the “lead bank” in the consortium, which sanctioned the “capital facility” to Gitanjali Group.
It was also found that in August 2013, the consortium of banks increased the borrowing facilities to Choksi’s firms from Rs 3,610 crore to Rs 5,280 crore. The PNB reportedly offered the highest loan amount of
Rs 587 crore to the company, while ICICI, which is the lead bank in the consortium, has given Rs 405 crore.
Choksi took loans from Allahabad Bank, Andhra Bank, Bank of Maharashtra, Bank of Baroda, Bank of India, Central Bank of India, Canara Bank, Corporation Bank, Dena Bank, Export Import Bank of India, Indian Overseas Bank, ICICI Bank, IDBI Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab National Bank, Punjab and Sind Bank, Standard Chartered Bank, State Bank of Hyderabad, State Bank of India, State Bank of Bikaner and Jaipur, Syndicate Bank, Union Bank, United Bank, Vijaya Bank, State Bank of Mauritius, Catholic Syrian Bank, lakshmi Vilas Bank, Jammu & Kashmir Bank and Oriental Bank of Commerce.
In a related development, the CBI on Wednesday questioned three officials from foreign branches of Indian banks for extending credit facilities to companies of absconding billionaire jeweller Nirav Modi and his uncle Mehul Choksi. Two officials of the Canara Bank’s branch in Bahrain, including its branch manager, and an official of Bank of India’s branch in Antwerp in Belgium were questioned by a CBI team in Mumbai.
On a related note, the CBI on Sunday had issued a Non-Bailable Warrant (NBW) against billionaire jeweller Nirav Modi and his uncle and business partner, Mehul Choksi, in connection with the PNB scam.
On March 30, Karnataka Bank has also disclosed a loan fraud amounting to Rs 86.47 crores involving Mehul Choksi owned Gitanjali Gems. The Mangalore-based private bank had also disclosed that it had reported the fraud to the Reserve Bank of India on fund-based working capital facilities extended to the company.
The CBI is currently probing the Rs 13,000 crore fraud at the PNB committed allegedly by diamond czar Nirav Modi and his uncle Mehul Choksi by obtaining fake letters of Understanding (loUs) in collusion with a former bank employee. Both the businessmen left the country with their families in the first week of January this year. It may be recalled that ICICI Bank MD & CEO Chanda Kochhar and Axis Bank MD Shikha Sharma were summoned by SFIO during an investigation into the loan given to Gitanjali Group. The scam, which reportedly began in 2011, was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies.