PNB fraud: Mumbai court allows ED to arrest Gokulnath Shetty
Gokulnath Shetty was earlier arrested by the Central Bureau of Investigation (CBI), which is probing the over Rs 13,500-crore fraud at PNB, in February, and subsequently, remanded to judicial custody.india Updated: Apr 03, 2018 23:26 IST
A court in Mumbai on Tuesday allowed the Enforcement Directorate (ED) to take the custody of a former Punjab National Bank (PNB) official, arrested earlier by the CBI in connection with an alleged bank fraud, involving diamantaire Nirav Modi.
“The court has allowed our application. Now, we will arrest former deputy general manager of PNB Gokulnath Shetty, a key accused,” special ED prosecutor Hiten Venegaonkar said.
Shetty was arrested by the Central Bureau of Investigation (CBI), which is probing the over Rs 13,500-crore fraud at PNB, in February, and subsequently, remanded to judicial custody.
The ED is probing the money laundering aspect of the fraud, which involves fraudulent issuance of letters of undertaking (LoUs) to firms owned by Modi and his uncle Mehul Choksi by some PNB officials.
The ED told the special court for Prevention of Money Laundering Act (PMLA) here that Shetty apparently played a key role in the execution of the illegal transactions and was “a key conspirator and actor in laundering of money”.
As Modi and Choksi had left the country, “it is imperative for the Directorate to examine the accused in custody and confront him with the documents and statements of the other suspected persons,” the ED application said.
According to the CBI, the firms owned by Modi and Choksi obtained the LoUs fraudulently in connivance with some PNB officials and the LoUs were used to obtain credit from overseas banks, causing a loss of over Rs 13,500 crore to PNB.