CBI quizzes PNB officials, issues LOCs against 10 firm executives

Posted on February 26, 2018 from India, National ι Report #180931

New Delhi, Feb 26 (IANS) The CBI on Monday said it questioned Punjab National Bank (PNB) Executive Director K.V. Brahmaji Rao, two General Managers and a retired official in connection with its probe into the Rs 11,300 crore fraud.

The Income Tax Department also said it had attached 66 more bank accounts related to accused Mehul Choksi of the Gitanjali Group.

"After Friday, 66 more bank accounts of the group have been attached with a total credit balance of Rs 80.07 crore," an IT Department official told IANS.

A Central Bureau of Investigation official said the agency questioned Rao for the third consecutive day at its Mumbai branch. On Sunday, too, Rao was questioned for over eight hours. He was quizzed along with PNB Managing Director-cum-CEO Sunil Mehta on Saturday.

The others quizzed were three General Manager-rank officials of the PNB Treasury Division and International Banking Division, including a retired official.

An informed source said the CBI had issued more than 10 Look out Circulars (LOCs) against executives of Nirav Modi and Mehul Choksi's Gitanjali Group who have not joined the probe yet.

According to CBI officials, the General Manager of the International Banking Division used to get daily reports on all credits and debits of the bank's NOSTRO accounts.

The source said the two senior PNB officials were questioned why daily reports were not tallied to find the difference in amounts.

NOSTRO is a system wherein one bank keeps money at another bank and both need to maintain records of debited and credited amount done by one bank on behalf of the other.

According to the source, the check was either deliberately avoided or attention was not given and that is why the scam went unnoticed and undetected from 2011 to 2017.

The source said the CBI also carried out searches at the Mumbai office of Cyril Amarchand Mangaldas last week.

"During searches at Nirav Modi's office and premises, the agency seized a few documents. On the basis of those, the CBI carried out searches at the law firm and collected more documents."

The source said the firm was involved in a banking assignment from Modi a few weeks before the scam was uncovered. The firm had never dealt with Nirav Modi or his companies prior to this, the source said.

CBI spokesperson Abhishek Dayal said: "Investigation is underway. CBI Director Alok Kumar Verma has directed probe officers to take all steps to ensure the investigations are concluded within given time frame."

"He (Verma) directed officers not to spare anyone found involved in these scams," Dayal added.

The CBI had filed the first FIR in the scam on February 14 against Nirav Modi, his wife Ami, brother Nishal, uncle Mehul Choksi and his firms Diamond R US, Solar Exports and Stellar Diamond.

Nirav Modi, his family and Choksi left the country in early January. The FIR mentions fraud of around Rs 6,400 crore.

The CBI filed the second FIR on February 15 for Rs 4,886.72 crore fraud against the Gitanjali group headed by Choksi.

The source said the CBI had written to the Chief Vigilance Officers of five banks to share details of money credited to Nostro accounts of PNB on receiving Letters of Undertaking and Foreign Letters of Credit, which were then withdrawn by Nirav and Choksi's group as buyers' credit.

The agency has till date arrested 12 persons in the case.

The I-T official said the department had carried out searches at four locations of Nirav Modi in Mumbai on Thursday.

"At one location, 173 paintings and art works by eminent artists have been placed under Prohibitory Orders as the process of their valuation is underway by experts from the JJ School of Art, Mumbai," the official added.