Scam-hit public sector lender Punjab National Bank (PNB) has been warned by markets regulator Securities and Exchanges Board of India (Sebi) for delay in disclosures to stock exchanges about the $2 billion fraudulent transactions, allegedly carried out by Nirav Modi and Gitanjali Group of companies.
Taking serious note of delay in making disclosures, on Thursday the Sebi has issued a warning letter to state-owned PNB -- the country's second largest lender.
The PNB was defrauded of over $2 billion allegedly by diamond trader Nirav Modi and his associates by fraudulent use of letters of Undertakings (loUs) and Foreign letters of Credit (loC) in connivance with certain bank officials.
“The non-compliances are viewed seriously and PNB is hereby warned and advised to be cautious in future to ensure compliance with all applicable provisions of the SEBI lODR (listing Obligations and Disclosure Requirements) Regulations,” Sebi said in a communication to the bank.
The Sebi's warning letter has been posted by the bank on stock exchanges as part of regulatory filing. However, Sebi observed that there were delays of 1-6 days by PNB in making disclosures to the stock exchanges pertaining to the filing of reports/complaints with Reserve Bank of India (RBI) and Central Bureau of Investigation (CBI).
Accordingly, PNB has not complied with various norms. The Sebi's communication refers to various disclosures made by PNB to stock exchanges during February and March this year regarding certain fraudulent transactions with respect to Nirav Modi group, Gitanjali group and others and referring of the same to law enforcement agencies.
Earlier this week, the CBI filed two charge sheets in the Nirav Modi fraud case in a Mumbai court. Besides others, the charge sheet names two executive directors of the PNB and its former CMD Usha.