ED raids Nirav’s residence;seizes Rs 5,716 cr assets

Source: The Hitavada      Date: 20 Feb 2018 08:19:06




THE Enforcement Directorate on Monday searched the Mumbai residence of diamond merchant Nirav Modi and seized assets worth Rs 5,716 crore as raids continued for the fifth day in connection with the agency’s money laundering probe in the alleged Rs 11,400 crore Punjab National Bank fraud. Official sources said ED sleuths searched Modi’s flat in the Samudra Mahal apartments in Worli. The central probe agency also conducted searches at 38 other locations in several cities, including Mumbai, Pune, Aurangabad, Thane, Kolkata, Delhi, Jammu, Lucknow, Bengaluru and Surat.

It seized fresh assets worth Rs 22 crore that include precious stones, cash and gold from the premises of Modi, his relative and business partner Mehul Choksi and others. The agency has so far seized diamonds, gold jewellery and other precious stones worth Rs 5,716 crore in the case and summoned Modi and Choksi, the promoter of Gitanjali Gems, to appear before it on February 23 at its Mubai zonal office. ED sources said the agency is also talking to senior PNB officials to ascertain how Letters of Understanding (LoUs) are issued and other bank operations done.

It also obtained information from the whistleblower in the case who had said he had raised flags against Choksis’ loan in 2013. “We are looking at securing the proceeds of crime. The ED will probe how much illicit wealth was created by the accused in the alleged fraud,” a senior official said. It has also sought PNB’s audit reports since 2011 from the RBI, they said. The sources said the ED was looking at collecting all financial documents -- personal and official -- of Modi, Choksi and their businesses to take the probe forward and attach properties in the coming days.

“A number of computer peripherals, hard drives and documents have been seized since the ED raids began on February 15. The seized items are being scrutinised,” another official said. ED Director Karnal Singh also flew down to Mumbai on Monday to review the anti-money laundering investigations, which are being conducted by a special team of the agency.

The ED is also moving to attach at least two dozen immovable properties of Modi, Choksi and their concerns under the Prevention of Money Laundering Act (PMLA). The ED and the Income Tax department have zeroed in on about 200 dummy or shell companies in India and abroad that were being used to route or receive funds as part of the alleged fraud. It is suspected that the shell firms were being used by the accused to launder money and create “benami” assets in the form of land, gold and precious stones, which is now being probed by the tax department.

Modi, Choksi and others are being investigated by multiple probe agencies after it recently came to light, following a complaint by the PNB, that they allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank. The CBI and the ED have registered two FIRs each to probe the case. CVC meets top banks and Finance Ministry officials: CENTRAL Vigilance Commissioner K V Chowdary today met senior officials of Punjab National Bank (PNB) and the Finance Ministry in connection with the Rs 11,400 crore fraud case, allegedly involving billionaire Nirav Modi and others, being probed by the CBI. The banks officials are understood to have shared with the Central Vigilance Commission (CVC) details of the action taken by them to deal with the fraud, official sources said.

They also shared details of the action taken by the management against the officials found allegedly involved in it, they said. The meeting, which started at 11 am at the Commission’s office here, lasted for more than two hours, the sources said. Besides Chowdary, Vigilance Commissioner T M Bhasin and officials from the Finance Ministry and PNB attended the meeting, they said. Arrested PNB officials illegally accessed Level-5 SWIFT password, shared it with firm: A FORMER Deputy Manager of Punjab National Bank (PNB), arrested in the fraud case, has told investigators that he had unauthorisedly obtained Level-5 password to the SWIFT system to authorise issuance of money through Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs). Gokulnath Shetty made the startling revelations when sleuths of Central Bureau of Investigation questioned him about the modus operandi of providing guarantee to other banks under the LoUs and issuance of enhanced FLCs.

He also told the investigators that he shared the password with other individuals, essentially employees, as well as directors of Nirav Modi’s company. PNB says it will honour all “bonafide commitments”: THE $1.8 billion fraud-hit Punjab National Bank (PNB) on Monday said it would honour all “bonafide commitments” under Letter of Undertakings (LoU) and Foreign Letters of Credit (FLC) as per the law. “PNB clarifies that we will honour all our bonafide commitments under LoUs and FLCs as per law of the land and as per specific existing guidelines of regulator i.e. RBI on LOUs and FLCs,” the company said on its website. The Reserve Bank of India (RBI) on Friday denied having sent any instruction to Punjab National Bank (PNB), which detected a $1.8 billion fraud, to meet its commitments under the Letter of Undertaking (LOU) to other banks.

PNB fraud committed in connivance with officials/politicians: Narayanasamy: The Punjab National Bank fraud had been committed in connivance with both bank officials and politicians and was “a major blow” to the BJP-led NDA Government’s claim of corruption-free governance, Puducherry Chief Minister V Narayanasamy charged on Monday.