PNB fraud: CBI arrests general manager-rank bank officer in Delhi

Rajesh Jindal was the head of the Brady House branch in Mumbai during 2009-11. On Tuesday, CBI had arrested five senior executives of jewellers Nirav Modi and Mehul Choksi’s companies

business Updated: Feb 21, 2018 20:16 IST
HT Correspondent and agencies, New Delhi
Punjab National Bank,Punjab National Bank fraud,PNB scam
Punjab National Bank’s Brady House branch in Mumbai. (Abhijit Bhatlekar/ Mint Photo)

The CBI has arrested a general manager-rank officer of the Punjab National Bank (PNB) posted at the its head office in New Delhi in connection with an alleged Rs 11,400-crore fraud involving billionaire jewellers Nirav Modi and his uncle Mehul Choksi, officials said on Wednesday.

Rajesh Jindal, who was the head of the Brady House branch in Mumbai during 2009-11, was taken into custody Tuesday night, according to the officials.

It was during Jindal’s tenure at the Brady House branch that the practice of issuance of LOUs (letters of undertaking) without sanctioned limits to Nirav Modi group firms had started. He is presently posted as GM Credit, PNB Head Office, New Delhi.

This is the 12th arrest in the case. Jindal is among six serving or retired PNB officials who have been arrested in the case so far. Earlier on Tuesday, the agency arrested Vipul Ambani and four other senior executives of Modi and Choksi’s companies, a spokesperson for the agency said.

Vipul Ambani is president (finance) of Modi’s Firestar International company. The others arrested are Arjun Patil, a senior executive of Firestar and Kavita Mankikar, executive assistant and authorised signatory of three firms cited by PNB in the case – Diamonds R US, Solar Exports, Stellar Diamonds.

The CBI has also arrested Kapil Khandelwal, chief financial officer of Nakshatra (a Gitanjali group company) and Niten Shahi, a manager with the group, the agency added. Choksi, Modi’s maternal uncle, heads the Gitanjali group.

Investigators say Modi, a jeweller to Hollywood stars such as Kate Winslet, left India with his family in January, prior to the case being filed.

“There is nothing, there is nothing in it,” his lawyer Vijay Aggarwal told Reuters, in response to the allegations.

Separately, in a letter to PNB officials, Modi stated that his companies owed the bank much less than the amount alleged by the bank. He also said PNB had jeopardized its chances of recovering the sums owed by going public with its allegations.

A police complaint filed by PNB, India’s second largest state-run bank, says companies linked to the jeweller and his relatives received credit worth close to Rs 11,400 crore between 2011 and 2017, using false guarantees supplied by two bank officials.

Finance minister Arun Jaitley decried on Tuesday a “lack of ethics” among sections of Indian business and criticised inadequate oversight by auditors and regulators.

Jaitley did not specifically refer to the scandal enveloping PNB in his speech to a room full of bankers, but his repeated referral to “a stray incident” appeared clearly to be aimed at the massive alleged fraud linked to Modi.

Since PNB disclosed the fraud last week the bank, auditors and the Reserve Bank of India have been under the spotlight over how they could have failed to detect a scam in which employees are suspected to have sent fraudulent loan guarantees through the SWIFT interbank messaging platform to lenders overseas.

First Published: Feb 21, 2018 09:31 IST