PNB’s Brady Road branch sealed as CBI quizzes Nirav Modi’s executive

The CBI continued interrogating two Punjab National Bank officials and an authorised signatory of Nirav Modi’s company, officials said.

india Updated: Feb 20, 2018 17:30 IST
Agencies, Mumbai
CBI,PNB scam,Punjab National Bank fraud
Punjab National Bank in Mumbai.(AFP File Photo)

The Central Bureau of Investigation (CBI) on Monday sealed the branch of Punjab National Bank (PNB) that is at the heart of a Rs 11,400-crore fraud involving billionaire jeweller Nirav Modi and his uncle, Mehul Choksi.

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 in its probe into one of India’s biggest banking scams, agency sources said.

Ambani was holding the position for last three to four years they said, adding he was understood to be a relative of late Dhirubhai Ambani, the founder of Reliance Industries.

The CBI pasted a notice on the branch premises in south Mumbai barring anyone from entering the office. The branch was sealed a day after the agency searched its premises and also questioned five more PNB officials, a source said, taking the total number of bank staff questioned so far to 11.

Three people, including two PNB employees, one of them retired, have been arrested and were presented before a Mumbai court over the weekend.

The agency was questioning Gokulnath Shetty, a retired deputy manager, and Manoj Kharat, the single window operator at the Brady Road branch, and the signatory of Modi’s company to uncover the money trail, sources said.

The bank has said Shetty and Kharat colluded with companies belonging to Modi and Choksi and issued fraudulent letters of undertaking to overseas branches of other Indian banks which lent money to the jewellers based on the guarantee from PNB.

The CBI was also examining financial transactions of 18 India-based subsidiaries of the Gitanjali group of companies promoted by Choksi.

PNB shares slid for a fourth straight day on Monday, falling 6.7%. The selloff has wiped out about $1.7 billion, or more than a quarter of the bank’s market value, since it disclosed the fraud last Wednesday. Other bank stocks with exposure to the fraudulent transactions that PNB says began in 2011 also fell.

Modi, whose clients include top Indian actors such as Priyanka Chopra and Hollywood stars such as Kate Winslet and Dakota Johnson, has not commented on the allegations. Modi and his family left India before PNB filed a complaint on the alleged fraud, police have said.

Including direct loans given to companies of Modi and Choksi, Indian banks are at the risk of taking a hit of more than $3 billion after the fraud, according to an internal tax department note seen by Reuters.

First Published: Feb 19, 2018 10:41 IST