CBI adds 4 more accused in PNB fraud case against Mehul Choksi

MUMBAI: The Central Bureau of Investigation (CBI) has added four more accused in the ₹13,578 crore fraud involving fugitive diamantaire Mehul Choksi

MUMBAI: The Central Bureau of Investigation (CBI) has added four more accused in the ₹13,578 crore fraud involving fugitive diamantaire Mehul Choksi. A special court has taken cognisance of the supplementary charge-sheet naming the quartet, including the internal auditor at Brady House branch of the public sector bank and issued them summons.

Special judge SK Karhale said the supplementary charge sheet disclosed sufficient prima facie material to proceed against Bishnubrata Mishra, then Internal Chief Auditor of PNB’s Brady House branch, and three private persons Jayesh Indravadan Shah, Ajit Kantilal Bheda and Deepen Chandravadan Shah - all of whom are alleged associates of Choksi.

“There is sufficient material on record to prima facie hold that accused Nos. 23 to 26 have committed the above referred offences,” the court said, adding that the charge sheet “prima-facie shows that accused Nos. 23 to 26 in conspiracy with charge-sheeted accused persons have committed the offences.” The court also noted that the sanction to prosecute them was placed on record in respect of Mishra, the lone public servant among the four accused.

In February 2018 - a month after Choksi fled the country, the CBI registered an FIR against Choksi and his Gitanjali group firms and several others, including PNB officials. The investigation by the central agency has revealed that the public sector bank had reported a fraud amounting to ₹7,080.86 crore in respect of entities controlled by Mehul Choksi. Besides, these entities also enjoyed credit facilities from a consortium of 32 banks and these banks have reported outstanding balance with respect to those entities to the tune of ₹5,099.74 crore as of December 31, 2017.

Investigation by CBI revealed that during the period 2011 and 2017, fraudulent Letters of Undertakings were obtained by the Gitanjali Group firms and based on the LoUs, funds were collected at foreign destinations.

According to the supplementary charge sheet, the four newly arraigned accused allegedly conspired with persons already charge-sheeted in the case to facilitate the issuance of 118 fraudulent and unauthorised Letters of Undertaking (LOUs) in 2015 in favour of overseas banks on behalf of Gitanjali Group entities despite the companies having no sanctioned credit limits. The court noted that these 118 LOUs pertained to transactions valued at about ₹21.87 crore.

The CBI further alleged that in 2016 they facilitated another 116 fraudulent LOUs for Gitanjali Group companies, including Asmi Jewellery India Ltd., Gili India Ltd., Gitanjali Exports Corporation Ltd. and Nakshatra Brands Ltd., without sanctioned credit limits, the mandatory 110% cash margin or recording the transactions in PNB’s core banking system, thereby enabling fraudulent buyers’ credit from overseas lenders.

The court recorded that the accused had prima facie conspired to facilitate the issuance of fraudulent LOUs and amendments under Foreign Letters of Credit, resulting in misuse of bank funds.

In a similar manner Choksi’s nephew Nirav Modi caused a loss of ₹6,498 crore to PNB during the same period. Modi too fled the country about a month before the CBI registered the FIR in January 2018.