ED seizes deposits, luxury cars worth Rs 100 cr in PNB scam

Source: The Hitavada      Date: 23 Feb 2018 09:55:20



Feb 22,


INTENSIFYING the crackdown on the Nirav Modi and Mehul Choksi groups, the ED on Thursday said it has frozen their shares, deposits and luxury cars worth over Rs 100 crore in the money laundering probe against them in the Rs 11,400-crore alleged PNB fraud. As the searches on the premises of the groups continued for the eighth day by the ED on Thursday, Income Tax Department officials said property worth Rs 1,200 crore of the Gitanjali Group located in Special Economic Zone (SEZ) in Hyderabad has been attached in a fresh action.

Nirav Modi, the billionaire diamond king under the scanner of various investigating agencies, failed to depose before the Enforcement Directorate(ED) after summons were issued to him, agency officials said.The officials said that Modi, who was summoned for Thursday by the agency under a section of the Prevention of Money Laundering Act (PMLA), has now been asked to join investigations and appear before the ED in Mumbai on February 26.

They said Modi replied to the Investigating Officer (IO), who is probing him and his uncle and Gitanjali Gems promoter MehulChoksi in the Punjab National Bank (PNB) fraud case, and said the temporary suspension of his passport and pending business issues are the reasons for his non-appearance. In a fresh development, the state-owned PNB asked Modi to come up with a concrete and implementable plan to settle the loss caused to it by fraudulent issuance of Letter of Undertakings (LoU) through one of its branches.
PNB said this in its response to a mail written by Modi, who allegedly cheated the bank of Rs 11,400 crore in connivance with a few bank officials.

ED officials said they have frozen mutual funds and shares worth Rs 86.72 crore belonging to Choksi and his group and Rs 7.80 crore owned by the Modi group.While the total value of these shares and mutual funds is Rs 94.52 crore, the costly four-wheelers are worth a few crores and hence the total seizure value stands to be over Rs 100 crore, the officials said.

The total seizure in the case stands now at Rs 5,826 crore, they said, adding it is being independently valued.The central probe agency also seized nine high-end cars belonging to Modi during the raids that were launched against him and Choksi on February 15 under provisions of the PMLA. The seized car brands include a Rolls Royce ‘Ghost’, a Mercedes Benz, a Porsche Panamera, three Honda models, a Toyota Fortuner and an Innova.

Modi, Choksi and others are being investigated by multiple probe agencies after the fraud came to light recently following a complaint by the PNB. The complaint alleged that they cheated the country’s second largest public sector lender 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. Both Modi and Choski are said to have left the country before criminal cases were lodged against them.

“You were getting LoUs issued illegally and in an unauthorised way through few bank officials. At no stage such facilities were extended by our bank to your three partner firms,” sources said citing mail response sent by PNB General Manager (international banking division) Ashwini Vats to Nirav Modi. When the alleged illegal dealings of Modi surfaced, the bank brought them to the notice of the law enforcement agencies as they apparently violated FEMA and anti-money laundering law, sources said.

“Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines. However, should you have any concrete and implementable plan, do revert back,” the mail said. Modi in his letter to the bank had said that the over-zealousness on the part of the bank to deal with the issue destroyed his jewellery brand and also jeopardised his ability to clear the dues.

“In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15, your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts,” Modi said in its letter to the bank.Separately, PNB said it has followed lawful avenues to recover its dues following the alleged swindling of funds in the fraud case.The bank also reaffirmed that it has enough assets to meet any liability.
“We have followed lawful avenues available to us as per law of the land to recover our dues,” the bank said in a regulatory filing.Stock exchanges had sought clarification on Modi’s comment that “PNB has closed all options to recover dues by going public”.

Vipul Ambani and 5 others in CBI custody till Mar 5:

A SPECIAL court here on Thursday remanded Vipul Ambani, the president (finance) of Nirav Modi’s Fire Star Diamond, and five others in CBI custody till March 5 in connection with the Rs 11,400 crore alleged fraud in Punjab National Bank (PNB). The six were arrested on Wednesday in connection with two FIRs registered by the CBI involving Modi and his uncle Mehul Choksi, the owner of Gitanjali Gems.

The FIRs are related 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, issued during 2011-17. Ambani, Kavita Mankikar (executive assistant and authorised signatory of three firms--Diamond R US, Stellar Diamond, Solar Exports), Arjun Patil (senior executive, Firestar group), and Rajesh Jindal, the then head of the Brady House branch of PNB, were listed as accused in the FIR registered by the CBI on January 31. Those arrested in connection with Choksi’s firms are Nakshatra group and Gitanjali group CFO Kapil Khandelwal and Gitanjali group manager Niten Shahi. The six were remanded in CBI custody till March 5 by Special Court Judge S R Tamboli. While seeking Shahi’s custody, the CBI said he fabricated applications and related documents for issuance of purported LoUs for fraudulently availing buyers credit from PNB.

Govt sends passport revocation notice to Nirav on email id provided by him, says MEA:

New Delhi,

Feb 22,


THE Government of India on Thursday said the fugitive businessman Nirav Modi can be “anywhere” and that it had sent him an intimation about the revocation of his passport to an email id provided by the businessman himself. “About his location in media reports you get to know eight to ten countries name...he can be anywhere,” remarked MEA spokesman Raveesh Kumar at a press conference here and sought to explain the legal procedures.

“There are certain legal processes which needs to be completed in time. Following advice by the agencies we did suspend the passports of Nirav Modi and Mehul Choksi. They are supposed to reply within a stipulated time. If they don’t, we will take further action,” he said answering questions. “On the location part, we (Ministry of External Affairs) don’t come into the picture,” he said.

An “intimation” about the suspension of his passport has been sent to Nirav Modi, who is accused of corruption charge and irregularities with regard to Rs 11,000 crore PNB scam. Once the intimation notice is sent to him, he is bound to reply within stipulated time. “So, now we are waiting for him to respond on the notice which has been served to him,” Kumar said. “I can share with you that he has acknowledged (the notice) in the sense that there were some confusion on the address on which it was to be sent.....we were asked to send the notice to a particular email id and that we have done and also shared the same on the email id sent to us by Modi himself,” MEA spokesman said.

PNB fraud favouring Nirav started in 2008, arrested bank officials tell CBI

By Rajnish Singh


Feb 22,


THE practice of illegally issuing Letters of Understanding (LoUs) and Foreign Letter of Credits (FLCs) and then rolling them over to favour Nirav Modi and Mehul Choksi groups started in 2008 and continued till these were discovered in January this year, according to CBI officials.The illicit activities resulting in fraud of Rs 11,300 crore occurred under the nose of top PNB officials but they claimed to be unaware of the scam.

The revelation came to the fore during questioning by CBI officials of Rajesh Jindal, who was holding the charge of Mumbai-based PNB’s Brady House Branch Head between August 2009 and May 2011, Gokul Nath Shetty, a retired Dy Manager, Bechu B. Tiwari (Chief Manager), Yashwant Joshi (Scale II manager of Forex Department) and Prafful Sawant (Scale I officer, export). The officials questions said they merely continued with the practice which is said to have started in 2008. It was not immediately clear who was in charge of the Forex Department when the illegal practice began.

The Central Bureau of Investigation (CBI) officials said the alleged multi-crore fraud by issuing LOUs and FLCs for sanction of loan to diamantire Nirav Modi and his uncle Mehul Choksi’s group of firms continued during Jindal’s tenure. Jindal, posted as GM Credit at PNB’s Head Office in New Delhi, was heading the second largest branch of the PNB when the practice of issuing the LoUs without sanctioned limits continued. Jindal was arrested on Tuesday night after his day-long questioning in Mumbai. He was the 12th accused person to be arrested in the case so far. The CBI investigators had managed to get his custody till March 5 from the special CBI court on Wednesday.Tiwari , Joshi and Sawant were also arrested on Monday for their alleged role in the scam and will remain in police custody till March 3.

All five PNB officials arrested so far were part of the forex department at the bank’s Brady House branch at the time of the fraud took place, said officials, adding these employees, in collaboration with the staff and associates of the firms headed by Nirav Modi and Choksi, commited wrongdoings for personal gains. The first FIR in the scam registered on January 31 alleged that Shetty and a single window operator Manoj Kharat, during their forex department posting, fraudulently issued eight LoUs (which are a form of bank guarantee) equivalent to Rs 280 crore on February 9, 10 and 14, 2017, favouring the Nirav Modi companies to Allahabad Bank, Hong Kong, and Axis Bank, Hong Kong, without following prescribed procedure.