PNB fraud: CBI to file chargesheet in May

In all, 292 allegedly fraudulent LoUs and 224 foreign letters of credit were generated and money sanctioned to Nirav Modi’s companies since 2011

The Central Bureau of Investigation (CBI) is expected to file its first chargesheet in the Rs 13,000 crore Punjab National Bank (PNB) letters of undertaking (LoUs) fraud in the second week of May.

According to sources, it has found major lapses by bank officials while issuing LoUs to jewellery Nirav Modi’s entities via the foreign branches of other Indian banks.

Sources say the chargesheet would detail flaws in the bank’s credit facilities to foreign branches and in its so-called SWIFT infrastructure, which appears to have been misused by some officials who have been arrested.

It would also mention irregularities by the government-owned lender in verification of documents while sanctioning the large amounts to Nirav Modi’s firms.

The chargesheet is likely to name Modi, uncle Mehul Choksi, Firestar Diamond’s chief financial officer Vipul Ambani, PNB officials Gokulnath Shetty (retired), Manoj Kharat and a few others.

CBI is also said to be making recommendations to the finance ministry and the Reserve Bank of India to revamp the Core Banking System connected with global credit facilities and to also revisit the system of automated alerts on suspicious and high-value transactions, beside other corrective measures and required action.

In all, 292 allegedly fraudulent LoUs and 224 foreign letters of credit were generated and money sanctioned to Nirav Modi’s companies since 2011.

A source said it would be a nearly 1,000-page chargesheet, currently at an advanced stage of compilation.

The charges would be of criminal conspiracy, cheating, forgery of documents, abuse of official position, and abetment.

CBI had registered three first information reports in the case and made eight arrests.

Shetty, who retired from PNB at end-May 2017, and Kharat will be charged with having entered into a conspiracy with directors of the Nirav Modi firms.

Besides, two officials of Canara Bank’s branch in Bahrain, including its branch manager, and an official of Bank of India’s branch in Antwerp, Belgium, are under the probe agency’s lens.

Photograph: PTI Photo