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PNB fraud: CBI arrests Gitanjali Group’s vice president Vipul Chitalia

Vipul Chitalia allegedly left India towards the end of January and was in Bangkok. The CBI had issued a lookout notice against him along with the main suspects in the PNB fraud — diamantaire Nirav Modi and his uncle Mehul Choksi.

business Updated: Mar 06, 2018 20:41 IST
HT Correspondent
HT Correspondent
Hindustan Times, Mumbai
PNB fraud,Vipul Chitalia,Gitanjali group
ED officials conducting raid at a Gitanjali jewel store in Bokaro, Jharkhand.(HT Photo)

The Central Bureau of Investigation (CBI) arrested Vipul Chitalia, a top executive of fugitive diamond merchant Mukesh Choksi’s Gitanjali Group, at Mumbai airport on Tuesday for his alleged role in the Rs 12,600-crore Punjab National Bank (PNB) fraud.

CBI officials caught Chitalia, the company’s vice president for banking operations, when he landed at the airport from Bangkok and was taken to the central agency’s office.

Chitalia allegedly left India towards the end of January and was in Bangkok. The CBI had issued a lookout notice against him along with the main suspects in the bank fraud — diamantaire Nirav Modi and his uncle Choksi.

A court sent Chitalia in the afternoon to 14 days in CBI custody. The prosecution alleged that he is a protagonist in the fraud and was reporting to Choksi directly.

The agency alleged that he was instrumental in preparing applications seeking letters of understanding (LoU) from PNB in convenience with Gokulnath Shetty, the bank’s deputy manager at its Brandy House branch.

The alleged fraud occurred as the deputy manager, with the assistance of one or more colleagues, issued over 100 fraudulent LoUs — essentially guarantees sent to other banks so that they would provide loans to a customer, said CBI officials, who asked not to be named.

After entering the transactions on the SWIFT messaging system, the official, who worked at the same branch from 2010 to 2017 despite normal bank practices of regular rotations, did not record them on PNB’s internal system, according to the bank’s complaint to the CBI.

The investigating agency said in the court on Tuesday that Chitalia gave evasive answers when questioned about the fraud. “There is reason to believe that he along with Choksi is a brain behind the conspiracy,” said the CBI application seeking his custody.

Chitalia was assigned a lawyer form legal aid since his counsel was not available. The lawyer said in court that Chitalia’s name was not mentioned in the FIR and he has been falsely implicated by the CBI.

PNB official Shetty, who was arrested earlier, was also produced in court on Tuesday. The agency sought his custody for two more weeks, saying they need to recover more documents and identify the roles of the other suspects.

After hearing the prosecution, the court remanded Shetty in CBI custody till March 15.

The CBI?has so far arrested 18 people after two FIRs were registered against Modi and Choksi. Among those arrested are retired and serving officials of the bank and senior executives linked to firms of Modi and Choksi.

Once the probe suggested that Modi was involved in money laundering, the enforcement directorate (ED) got involved too. It has conducted around 200 raids at several premises linked to Modi, Choksi and their firms across the country, and seized immovable and movable assets worth around Rs 6,100 crore.

The directorate of revenue intelligence (DRI) received a go-ahead recently from the Centre to prosecute Modi in a 2014 case that accuses him of exporting cut and polished diamonds by overvaluing them to evade duty and corner benefits for firms operating out of special economic zones.

There are indications that Modi not only evaded duty but siphoned large sums of money through his firms to other countries, a senior DRI official said, requesting anonymity.

First Published: Mar 06, 2018 20:24 IST