PNB fraud: ED attaches Rs 12-bn assets of Mehul Choksi; 10 developments

Mehul Choksi
Probe agencies have stepped up action against Diamantaire Nirav Modi and his uncle Mehul Choksi

of the Gitanjali Group in the 126-billion Punjab National Fraud Case. In the latest blow to Mehul Choksi, the Enforcement Directorate (ED) on Thursday attached 41 properties worth Rs 12.17 billion belonging to him and his companies. 

Fifteen flats, 17 office premises in Mumbai, Hyderabad Gems SEZ in Andhra Pradesh, Shopping Mall in Kolkata, farmhouse in Alibaug and 231 acres of land in Maharashtra and Tamil Nadu are among the properties attached by the ED. 

The development comes a day after a Blue Corner notice was issued against Nirav Modi and Choksi. The notice is issued by Bureau of Immigration to locate, identify or obtain information on a person of interest in a criminal investigation.

The notice will be valid for a year starting February 22 at all ports of embarkation.

Earlier IT department attached four more properties of the Nirav Modi group which included his farmhouse in Alibaug worth Rs 130 million and a 5.24 Mw solar power plant over an area of 135 acres in Ahmednagar worth Rs 700 million.

Choksi and Modi have been accused of defrauding PNB of Rs 126 billion, with Rs 13 billion being added to the fraud kitty on Monday night.

Earlier, the amount stated to have been defrauded by Modi and Choksi's companies stood at Rs 113 billion.

The CBI has filed two FIRs in the scam. The first one was filed on February 14 for a Rs 64 billion fraud against Nirav Modi, his wife Ami, brother Nishal, uncle Choksi and his firms Diamond R US, Solar Exports and Stellar Diamond. The second was filed on February 15 for a Rs 48.86 billion fraud against Choksi's Gitanjali Group.

Modi, his family and Choksi left the country in early January.

Here are the top 10 developments regarding the massive banking scam that has hit PNB:

1. ED attaches Mehul Choksi's properties: ED on Thursday attached 41 properties, worth Rs 12.17 billion, belonging to Mehul Choksi and his companies. They include 15 flats and 17 office premises in Mumbai, Hyderabad Gems SEZ in AP, a shopping mall in Kolkata, farm house in Alibaug and 231 acres land in Maharashtra and Tamil Nadu. "At least 41 properties worth Rs 12.17 billion (1217.20 crore) of Choksi and companies controlled by him has been attached," an ED official told IANS.

2. Blue corner notice against Nirav Modi, Choksi: On Wednesday, Bureau of Immigration issued a Blue Corner notice against Nirav Modi and his uncle Mehul Choksi of Gitanjali Group. An Income Tax department official said the Blue Corner notice -- to locate, identify or obtain information on a person of interest in a criminal investigation -- was issued by the Bureau of Immigration against the two which will be valid for a year starting February 22 at all ports of embarkation.

The notice will be valid for a year starting February 22 at all ports of embarkation.

3. Nirav Modi refuses to join probe: Diamantaire Nirav Modi has refused to join CBI investigation in the PNB scam case, saying he has "business abroad", officials said on Wednesday.

Modi was asked to appear before the agency in connection with its probe in the over $2 billion alleged fraud perpetrated in the PNB. The probe agency had summoned Modi through email. 

The CBI, on Wednesday, directed him to contact the embassy of India in the country where he is staying so that his travel can be arranged.

4. Economic offenders bill on fast-track: In bad news for absconders like Vijay Mally and Nirav Modi, the government is planning to issue the the Fugitive Economic Offenders Bill as an ordinance before the monsoon session of Parliament. 

If it is not passed in the Budget session, the ordinance will be then sought to be formalised as an Act in the monsoon session, a senior government official told Business Standard.

The draft bill has already got the approval of law ministry and might soon be placed before the Cabinet for approval. If the bill gets the green signal from the Cabinet, it will then be tabled in the Parliament.

The bill, if passed, will allow the government to confiscate properties of economic offenders who flee India. At present there are multiple laws in this regard but it is a complicated process. More importantly, existing cases could come under the proposed law. This means that cases related to Nirav Modi, Mehul Choski, and Vijay Mallya will also be covered.

5. PNB appoints group Chief Risk Officer: In a development that may be seen as a claassic case of shutting the door after the horse has bolted, Punjab National Bank appointed A K Pradhan as Group Chief Risk Officer. Bank revealed the appointment in a regulatory filing on Tuesday.

6. PNB Brady House branch's internal auditor arrested: The CBI on Wednesday arrested an internal auditor of PNB's Brady House branch in Mumbai. The arrested auditor M K Sharma was "allegedly responsible for auditing the systems and practices" of the bank's Brady House branch in Mumbai and report deficiencies to zonal audit office, a police spokesman said.

7. Finance Ministry sets 15-day deadline for banks: Finance Ministry said there was a 15-day deadline for PSBs to take pre-emptive action and identify gaps to gear up for rising operational and technological risks, according to a news agency. PSBs have also been asked to learn from best practices and pinpoint strategies, including technological solutions. Further, PSBs would have time to clear the accountability of senior functionaries within this deadline.

8. PNB says scam may cost bank Rs 13 bn more: On Monday, PNB said that the amount of fraudulent transactions could be Rs 13 billion (Rs 1,300 crore) more than the current estimate of about Rs 114 billion (Rs 11,400 crore).

The bank, in a filing to the BSE,  said the value of unauthorised transactions could go up by more than Rs 13 billion (Rs 1,300 crore).

9. Key Nirav Modi papers seized by CBI: CBI seized "crucial documents" related to the Nirav Modi case from the premises of Mumbai-based law firm Cyril Amarchand Mangaldas (CAM). Confirming the report, a CBI official said the agency had conducted a search operation at the law firm last week in connection with the fraud at Punjab National Bank.

However, the agency clarified that it was not going to examine the law firm. "The law firm was in possession of some crucial documents, which are highly relevant for our investigation," said the official cited above. "Though the law firm is not officially Nirav Modi's legal advisor, we have found some links indicating that CAM was given some mandate, which was called off when the scam broke out," said the official.

10. Modi & co skip ED summons: On Monday, Nirav Modi, his wife Ami, and his uncle Choksi skipped their summons by the Enforcement Directorate (ED) in Mumbai.

If fresh summons are not issued by the agency, then it is understood that ED will move a special court in Mumbai seeking non-bailable arrest warrants against them.

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