PNB posts net loss of Rs 13417 crore for Q4

Indian police charge billionaire jeweller over bank fraud
Nirav Modi
Author

15 May, 2018

"PNB scam case: Central Bureau of Investigation submitted charge-sheet in Special CBI Court in Mumbai", the news agency ANI reported.

The agency has said then PNB MD and CEO Usha Ananthasubramanian and her top officials also failed to prevent the fraud despite having knowledge of the modus operandi, according to sources.

Following the government's directive, which came within hours of the CBI filing a chargesheet in the country's biggest banking fraud case, the PNB board divested its two executive directors, K.V. Brahmaji Rao and Sanjiv Sharan, of all financial and executive powers.

The CBI will file second chargesheet in the case, involving Mehul Choksi of Gitanjali Gems Ltd, by the end of this week.

"The (PNB) board has made a decision to divest EDs of the functional and financial responsibilities and have also requested the government to replace them", Kumar said, adding the government is committed to taking strict action against erring officials.

"At most a case could be made out for the MD and directors not observing sufficient due diligence in detecting the fraud", the director of a Delhi-based state-run bank said. Vipul Ambani, CFO of Firestar International, the flagship of Nirav Modi's global business, was allegedly aware of the illegalities and kept all the related documents with him.

The Reserve Bank of India had sent a questionnaire to the officials seeking to know the status of LoU issuing process in their bank which was responded to by Ahad in concurrence with his seniors including Ananthasubramanian in which he had stated that all was well in the bank, they said.

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When asked about action against two MDs named in the FIR related to loans given to Aircel by IDBI Bank, he said, "I would like to make it clear that you can not take action only on hearsay".

Sources said the Allahabad Bank board is likely to meet in a day or two.

It has also detailed the roles of Nirav Modi, his brother Nishal Modi and Subhash Parab, an executive in Nirav Modi's company. Before PNB filed the complaint with the CBI, both Modi and Choksi had left the country.

Among accused is bank's former chief Usha Ananthasubramanian.

Provisions rose almost four-fold to Rs20,353 crore from Rs4,466 crore in the year ago period, on account of rising bad debt, the bank's stock exchange filing showed. Reconciliation of CBS and SWIFT messages was not done despite repeated RBI circulars caution notices and questionnaires, it alleged. They are at large after defrauding PNB of over Rs 14,000 crore using 1,200 illegally secured letters of undertakings (LOUs).

Three FIRs have been filed by CBI in this particular case against Nirav Modi, Mehul Choksi and also against Modi's company Firestar Diamonds between January and March. Total income came in at ₹12,946 crore, against ₹14,989 crore in the same quarter previous year.


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