Probe into PNB scam starts in full swing; 200 shell firms under scanner

The CBI is examining the balance sheets of 18 India-based subsidiaries of the Gitanjali group of firms, promoted by Mehul Choksi, to get a grip on the trail of funds the group took from banks on the basis of guarantees furnished by Punjab National Bank (PNB).

The agency on Sunday evening did searches at the Brady Road branch of PNB in Mumbai, and the operation is likely to continue till morning. CBI officials said the agency was questioning Gokulnath Shetty, a retired PNB official; Manoj Kharat, a serving one; and a signatory of a company run by Nirav Modi, the co-accused, apart from other officials of PNB. They said the agency was analysing the records recovered from a server seized during searches after registering the FIR against Choksi.

When asked about a possible quid pro quo involved in the alleged scam perpetrated in collusion with billionaire diamond merchants Choksi and his nephew Modi and Punjab National Bank officials, they said they were looking into it.

“The focus is to understand the depth of the scam, the movement of funds and the role of other senior officials,” an official said.200 shell firms under scanner of agencies

At least 200 shell firms and “benami” assets have come under the scanner of investigative agencies. The Enforcement Directorate (ED), which continued its searches on the premises of Modi and Choksi for the fourth day on Sunday, is moving to attach at least 24 immovable properties under the Prevention of Money Laundering Act (PMLA).

The ED on Sunday raided at least 45 premises, including jewellery showrooms and workshops, in the country. It seized diamond jewellery worth around Rs 10 million from an outlet in Patna.

“As many as 29 properties — of Modi, his family members, and companies — that have been provisionally attached by the Income Tax department are being assessed by the ED under the PMLA. A few more assets will be attached soon under the anti-money laundering law,” a senior ED official said.

CVC meeting with PNB, FinMin

The Central Vigilance Commission will meet the PNB management and finance ministry officials on Monday in connection with the fraud. While PNB officials are saying the management keeps meeting the CVC regularly, this one is important owing to the fraud.

Sources said PNB Managing Director and Chief Executive officer Sunil Mehta, accompanied by the Bank Chief Vigilance Officer (CVO), is likely to appear before the CVC. The PNB CVO is likely to give a presentation to the CVC about the fraud. The additional secretary, department of financial services, might be present at the meeting.

Wilful defaulters’ outstanding dues to PNB up 23%

Wilful defaulters’ outstanding dues to PNB have jumped 23 per cent — with each having an outstanding loan of Rs 2.5 million and above — in just over eight months ended January. The gross outstanding is Rs 145.93 billion as of January 31, 2018, according to the PNB data.

CRISIL puts PNB on ‘watch’

Rating agency CRISIL has put PNB ratings on ‘watch’, following the Rs 114 billion fraud. The agency has the AAA and AA ratings on the various debt instruments of the Delhi-based public sector lender.

“We’ve sought clarity from the PNB management to understand the timeline and the quantum of crystallization of this contingent liability, prospects for recovery, estimated provisioning, potential impact on capitalisation ratios and expectation of additional capital support, amongst others,” CRISIL said.

City Union Bank were robbed of  $2 mn through SWIFT

The fragility of the SWIFT financial platform has again come to the fore. City Union Bank said on Sunday that “cyber criminals” had hacked its systems and transferred nearly $2 million through three unauthorised remittances to lenders overseas via the SWIFT financial platform.

The comments come after the small private lender on Saturday had disclosed it had discovered the three “fraudulent remittances”, which were sent via correspondent banks to accounts in Dubai, Turkey, and China.

Chief Executive Officer N Kamakodi called it a “conspiracy” involving multiple countries, and added the lender was still investigating how it had happened.

“This is basically a cyberattack by international cyber criminals,” he said. 

Officials of other banks under scanner

Officials at overseas branches of other banks where the fraudulently issued letters of undertaking (LoUs) were encashed are under the scanner, according to sources. They include officials of the Hong Kong branches of Allahabad Bank, State Bank of India (SBI), Union Bank, UCO Bank, and Axis Bank.

Rahul asks PM, FM to speak up

Congress President Rahul Gandhi on Sunday asked Prime Minister Narendra Modi and Finance Minister Arun Jaitley to comment on the PNB scam and not behave like the “guilty”.

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