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As probe into PNB case widens, a look at what led to the loan fraud

As investigations by multiple government agencies widen in the Punjab National Bank scam, here’s a timeline of events which led to the alleged loan fraud.

business Updated: Feb 21, 2018 19:22 IST
HT Correspondent
HT Correspondent
New Delhi, Hindustan Times
Punjab National Bank,Punjab National Bank scam,PNB fraud
A Punjab National Bank branch in Mumbai. (PTI file photo)

State-run Punjab National Bank (PNB) has said it had unearthed fraudulent transactions of around Rs 11,400 crore in one of its branches in Mumbai, and filed a complaint with the Central Bureau of Investigation (CBI) on the fraud amid concern that the contagion could spread to other banks.

As investigations by multiple government agencies widen, here’s a timeline of events which led to the alleged loan fraud:

January 16: Nirav Modi group representatives approach PNB’s branch seeking issuance of letter of undertakings for raising buyer’s credit. New set of bank officials insist on cash margins which the group contests.

January 16-January 24: Closer scrutiny of books shows earlier letters of understanding (LOUs) issued to the group firms made without entries in bank’s books and without supporting documentation. PNB holds a series of meetings with the firms asking them to pay the amounts and provide necessary documentation related to the imports.

January 25: First set of LOU liabilities related to three Modi group firms amounting to Rs 281 crore mature.

January 29: The bank files a fraud compliant against Modi group firms with RBI. Moves to register FIR with CBI.

February 4: CBI issues lookout notice against Modi.

February 5: PNB informs stock exchanges about the Rs 281 crore fraud involving the Modi group.

February 7: PNB files fraud complaint against Mehul Choksi promoted Gitanjali group companies with RBI for Rs 65 crore LOU liability due on February 9. FIR also filed against these companies with CBI.

February 12: Total fraud of Rs 11,394 crore detected involving Modi group firms, Gitanjali group firms and Chandri Paper and Allied Products Pvt Ltd dating back to 2011.

February 13:Bank files fresh FIR with CBI and registers complaint with Enforcement Directorate.

February 14: Bank informs the stock exchanges on the magnitude of the fraud.

February 15:ED conducts raids across 17 locations; attaches properties worth Rs 5,100 crore.

February 16:MEA suspends Modi and Choksi’s passport; CBI seeks Interpol help amid reports in several media outlets that the billionaire jeweller had left India.

February 17: The CBI arrested a former employee of PNB who is believed to be a key figure in the fraud disclosed by the country’s second-largest state-run lender earlier this week. Two other persons were arrested too.

February 19: Two top officials of Gitanjali Gems resigned on Monday. While one of them said her ‘conscience didn’t permit’ her to continue, the other said he had to take the step due to his wife’s surgery.

February 19: The Central Bureau of Investigation (CBI) sealed the Brady Road branch of PNB in Mumbai that is at the heart of a Rs 11,400-crore fraud. The CBI was also questioning Vipul Ambani, the chief financial officer of Modi’s Fire Star diamond company, and employees of PNB’s Brady Road branch.

February 20: CBI arrested Vipul Ambani and four other senior executives of Nirav Modi and Mehul Choksi’s companies on Tuesday at a Mumbai branch of the Punjab National Bank, a spokesperson for the agency said.

February 20: Finance minister Arun Jaitley blamed the Punjab National Bank’s management and auditors for failing to detect the Rs 11,400-crore fraud and said the scamsters will be chased and measures will be put in place to prevent such scams.

February 21: The Income Tax department slapped fresh charges under the new anti-black money law against jeweller Nirav Modi for allegedly holding an illegal asset abroad, official sources said.

February 21:CBI arrested a general manager-rank officer of the Punjab National Bank (PNB) posted at the its head office in New Delhi in connection with the multi-crore fraud.

February 21: Nirav Modi wrote an email to his employees in India saying they should look for other jobs because he will not be able to pay them.

First Published: Feb 16, 2018 22:34 IST