Multiple enforcement and investigative agencies on Saturday continued with their operations in the Rs 11,400-crore Punjab National Bank (PNB) scam involving billionaire diamond jeweller Nirav Modi.
The CBI arrested three accused while the Enforcement Directorate (ED) raided 21 showrooms in connection with the case, sealed six of Nirav’s properties and seized besides diamonds, gold, precious stones, metals and jewellery worth Rs 25 crore taking the total seizure so far to Rs 5,674 crore. The Income Tax Department attached nine more accounts with Rs 81 lakh cash belonging to Gitajanli Group, of Nirav’s uncle Mehul Choksi. Till late evening, the CBI was also continuing with its search in the PNB’s Brady House Branch and examining its officials.
The Central Vigilance Commission (CVC), for its part, summoned the PNB management and Finance Ministry officials to appear before it on February 19. CVC is the fourth Government agency after ED, CBI and IT Department which has swung into action.
Those arrested are Gokulnath Shetty, retired deputy manager of PNB, Manoj Kharat, another PNB employee, and Hemant Bhat, the authorised signatory of the Nirav Modi group of firms. The CBI told the court Bhat was not cooperating. The accused were produced before a special CBI court which remanded them to police custody till March 3.
The arrest comes after the second case registered by the CBI against two PNB officials and others of the Gitanjali Gems group in relation to the fraud.
The ED raided the showrooms in Patna, Bhopal, Jaipur, Hyderabad and Durgapur run by Mehul Choksi’s Gitanjali Jewels and seized diamonds, gold, precious stones, metals and jewellery worth Rs 25 crore.
The CBI in its remand application stated that the fraud is estimated at Rs 6,000 crore, which is much more than the Rs 280 crore reported by the bank. The CBI stated in the court that logs in SWIFT message were utilised by many officials including Gokulnath Shetty by using password in capacity of authoriser enabling fraudulent SWIFT ( society for worldwide interbank financial telecommunication network) messages. Involvement and connivance of insiders and outsiders cannot be ruled out and there is possibility that a number of senior officials of PNB are involved in the fraud, according to the CBI.
The CBI officials further said the court that they need some important documents related to this scam which are yet to be recovered.
CBI officials stated that Gokulnath was picked up on Thursday from his flat at Rustomjee Ozone complex in Malad. He was arrested on Saturday. Kharat was picked up from his farmhouse in Karjat.
The bank officials are alleged to have issued fake letter of Undertaking (loUs) to overseas branches of domestic banks based on which those banks released funds to the suppliers of Nirav Modi’s firms and his associate Mehul Choksi of Gitanjali Gems ltd.
The CBI FIR alleged that Shetty and Karat in connivance with accused companies defrauded PNB to the tune of Rs 4,886.72 crore during 2017-18.
The fraud was revealed in mid-January when Nirav Modi’s companies sought a fresh loan in early January. The officials who had helped them earlier had retired and when the bank insisted on guarantees, the companies allegedly said they had used the facility before. When the bank started investigating, it discovered fraud letters of Undertaking - a bank guarantee issued for overseas import payments. These letters were cashed overseas from different banks.
In the meantime, the ED has sought help of Federal Bureau of Investigation of the US (FBI) to trace and locate the Modi who is hiding in the US.
The ED has also decided to reach out to the 16 members of Eurasian group on combating money laundering and financing of terrorism known as EAG, 41 members of the Asia/Pacific Group (APG) on money laundering and 35 members of Financial Action Task Force (FATF) to locate the shops and showrooms of Modi and Geetanjali. Sources in the ED stated that they first task to seize as much properties as they can not only in India but abroad.
The agency has also directed all the accused companies Gitanjali Gems, Gili, Nakshatra, Solar Exports, Stellar Diamonds, and Diamonds RUs not to carry out sale and purchases at any stores or outlets of their companies.