Union Bank says it has $45 million direct exposure to Nirav Modi, Gitanjali firms
Companies belonging to Modi and his uncle Mehul Choksi have been accused by Punjab National Bank of defrauding the bank of over $2 billionbusiness Updated: Mar 09, 2018 15:33 IST
Union Bank of India has direct credit exposure of about Rs1.2 billion rupees ($18.4 million) to companies controlled by jeweller Nirav Modi, and another Rs 1.75 billion ($26.9 million) to Gitanjali group of companies, its chief executive told Reuters on Friday.
Companies belonging to Modi and his uncle Mehul Choksi, who heads the Gitanjali group, have been accused by Punjab National Bank of defrauding the bank of over $2 billion. The bank alleges firms controlled by the duo colluded with rogue PNB staff to secure fraudulent guarantees that were used to raise credit from overseas branches of Indian banks.
The latest Union Bank figures are separate from the $300 million exposure it had previously reported on account of the fraudulent PNB guarantees, said Rajkiran Rai, Chief Executive of state-run Union Bank.
This week, the Central Bureau of Investigation (CBI) filed a new complaint against jeweller Modi alleging that companies he controlled had misused even legitimate loans and guarantees.
Lenders including Union Bank have recalled loans to Modi’s and Choksi’s firms after the news of the fraud, according to the authorities.