ED seizes Rs 10 crore assets linked to Nirav Modi, arrests firm’s CFO

RSTV Bureau

 

Punjab National Bank officials, arrested in connection with the multi-thousand crore rupees fraud involving diamantaire Nirav Modi, being produced at the Special CBI court in Mumbai

Punjab National Bank officials, arrested in connection with the multi-thousand crore rupees fraud involving diamantaire Nirav Modi, being produced at the Special CBI court in Mumbai

The CBI made its first high-profile arrest in the 11,400 crore rupees alleged Punjab National Bank fraud on Tuesday. The central investigation agency arrested Nirav Modi’s aide Vipul Ambani who is the Chief Financial Officer of Modi’s companies. Vipul Ambani, who was being questioned since Sunday, was arrested after the agency found him “non-cooperative” in taking forward the investigation.

Ambani was arrested along with Kavita Mankikar who is the authorised signatory of three companies, senior executive of Firestar Diamonds Arjun Patil, CFO of Nakshatra and Gitanjali group Kapil Khandelwal and Manager of Gitanjali group Niten Shahi. Mankikar was listed as an accused in the first FIR registered by the CBI on January 31 in which Modi, his wife Ami, brother Nishal and uncle Mehul Choksi also figured as accused.

Fresh arrests came on a day when Finance Minister Arun Jaitley, in his first public statement since the fraud came to light, said the state would chase down cheaters to the end. Without naming either the alleged kingpin of the fraud, billionaire jeweller Nirav Modi, or Punjab National Bank, Jaitley questioned the ethics of some businesses in the country and asked as to why the bank’s internal and external auditors could not detect the fraud which had been going on for 7 long years.

“It is incumbent on us as a state, till the last legitimate capacity of the state, to chase these people (fraudsters) to the last possible conclusion to make sure the country is not cheated,” Jaitley said.

CBI meanwhile, arrested a General Manager-rank officer of the Punjab National Bank posted at the bank’s head office in Delhi in connection with the alleged Rs 11,400-crore fraud. Rajesh Jindal, who was the head of the Brady House, Mumbai, branch of the bank during 2009-11, was taken into custody on Monday night. It is alleged that the issuance of Letters of Undertaking (LOUs) to Nirav Modi group firms without sanctioned limits started during his tenure. Jindal is presently posted as General Manager, Credit at PNB’s Head Office in New Delhi.

Three arrested PNB officials –Bechhu Tiwari, Yashwant Joshi and Praful Sawant were produced before a special court on Tuesday which sent them to CBI’s custody till March 3. It has emerged during their questioning so far that they were trying to shift the blame for the scam on their colleagues–Gokulnath Shetty (a retired official) and Manoj Kharat– taken into custody earlier.

As part of the multi-agency probe, an Executive Director and nine other senior officials of the PNB have also been grilled by the CBI in connection with the “fraudulent” guarantees issued by the bank in favour of Nirav Modi and his uncle Mehul Choksi.

The Punjab National Bank branch in Mumbai where fraudulent transactions worth over Rs 11,000 crore were detected.

The Punjab National Bank branch in Mumbai where fraudulent transactions worth over Rs 11,000 crore were detected.

Meanwhile, searches by the Enforcement Directorate continued for the sixth day on Tuesday. Assets worth Rupees 10 crore have been seized during searches at 13 premises linked to Nirav Modi and Choksi. While, the team of over 110 officials from Income Tax department have raided 20 premises linked to Gitanjali Gems promoter Choksi and firms associated with him in connection with a tax evasion case. The searches have been conducted in Mumbai, Pune, Surat, Hyderabad, Bengaluru and few other cities. The department had recently attached bank accounts and other assets of Choksi and the Gitanjali group.

The CBI on Monday had sealed South Mumbai’s Brady Road branch of Punjab National Bank that is at the heart of a Rs 11,400-crore fraud involving Nirav Modi and Mehul Choksi.

File photo of celebrity jeweller Nirav Modi prime accused behind PNB fraud

File photo of celebrity jeweller Nirav Modi prime accused behind PNB fraud

Meanwhile, Nirav Modi hit back at Punjab National Bank, saying its ‘overzealousness’ has shut the doors on his ability to clear his dues, which he claims are much lower than the Rs 11,400 crore that the bank has gone public with. In a letter to the bank’s management on February 15/16,Nirav Modi pegged the amount his companies owe the bank at under Rs 5,000 crore and said the bank has wrongly named his brother, wife and uncle who was not at all concerned with the operations of the three firms or any other.

The CBI has registered two cases involving Modi and Choksi relating to fraudulent issuance of 150 Letters of Undertaking (LoU) (a kind of bank guarantee) worth Rs 6,498 crore and 143 LoUs worth Rs 4,886 crore. The ED has also registered two separate cases to probe money laundering allegations against Choksi and Modi.

An LoU is a guarantee which is given by the issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to credit giving bank along with accruing interest.

(With inputs from PTI)