PNB scam: CBI files its first charge-sheet

Ivan Schwartz
May 15, 2018

Mumbai: The Central Bureau of Investigation (CBI) on Monday submitted a 7,000-page chargesheet in the Rs 13,400-crore Punjab National Bank (PNB) scam in a special court, where it mentioned charges against 22 people - including absconding billionaire jeweller Nirav Modi, his brother Nishal Modi and their firm's executive Subhash Parab - and three private firms.

A LoU is a guarantee given by an issuing bank to Indian banks having branches overseas to grant short-term credit to the applicant.

The CBI filed the charge sheet for alleged criminal conspiracy, cheating, forgery and provisions of Prevention of Corruption Act.

The charges filed on Monday are the first formal ones to be filed in the sprawling case that has stunned investors, shaken the Indian banking sector and prompted a major regulatory crackdown. The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing an worldwide messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB's internal banking software, thus bypassing scrutiny in the bank, they said. Following this, the accused will not be able to seek bail. "Around 80 witnesses have been examined and voluminous documents have been collected", it said in a statement, adding further investigation was ongoing. The voluminous chargesheet names 25 accused including Usha Ananthasubramanian, MD & CEO of Allahabad Bank, two Executive Directors of PNB, Brahmaji Rao and Sanjeev Saran and its General Manager Nehal Ahad and Modi's three firms - Stellar Diamonds, Solar Exports and Diamond R' US.

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He said the whole system at PNB has failed and the top management has to take responsibility given the magnitude of the fraud. Ananthasubramanian is now at the helm of anther state-run lender Allahabad Bank, an MD & CEO no less. Modi's lawyer declined to comment saying he was yet to see the charge sheet.

A Ministry official told IANS that the Department of Financial Services (DFS) had asked the government representative in the Allahabad Bank to come up with a proposal before the board to strip Ananthasubramanian of her powers. The government holds a little over 62 per cent stake in PNB and close to 65 per cent in Allahabad Bank.

The agency has not given in detail the role of Mehul Choksi in the present charge sheet. "However, the said senior PNB officials, both serving and retired, failed to do so and therefore they are chargesheeted", said an official familiar to the probe.

Other reports by GizPress

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