New Delhi, Feb 27 The ongoing Punjab National Bank (PNB) fraud case took a turn for the worse on Tuesday as the bank reported an additional Rs 1,300 crore unauthorised transactions, taking the estimated quantum to around Rs 12,600 crore in the scam related to diamond trader Nirav Modi and owner of Gitanjali Gems, Mehul Choksi.
In a 11.22 pm filing with the stock exchanges on Monday, the bank said: "In continuation to our filing with stock exchanges on February 14, 2018, we have to inform that quantum of reported unauthorised transactions can increase by $204.25 million."
Earlier on February 14, PNB, the second largest public sector bank in India, had said it had detected a $1.8 billion or Rs 11,300 crore, fraud in the Brady House Branch in Mumbai. On Tuesday, the bank said in regulatory filings with the stock exchanges that it had appointed a group Chief Risk Officer.
In another development, Firestar Diamond Inc, the US company of Indian billionaire diamond trader Nirav Modi filed for bankruptcy in a New York court, under chapter 11.
According to the court filing at the Southern District Of New York on Monday, the firm listed assets and liabilities in the range of $50 million and $100 million. A Chapter 11 filing under the Bankruptcy code usually allows a company to reorganise its business.
The Central Bureau of Investigation (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.
The CBI on Tuesday said it had questioned former Punjab National Bank Managing Director Usha Anant Subramanian and ICICI Bank Executive Director N.S. Kanan in connection with ithe bank fraud case.
"The agency also questioned the ICICI Executive Director because it was the leader of a consortium of banks that sent money to Mehul Choksi's Gitanjali Group," a CBI official, who did not want to be named, said.
In the evening, a statement from ICICI said it was a lender of working capital to the Gitanjali group of companies along with several other banks in the consortium. It said its exposure was not the largest in the consortium and it had not lent any money to the Nirav Modi group, nor did it have any buyer's credit exposure against LoUs to the two groups.
The CBI also questioned two PNB General Managers, Nehal Ahad and Vimlesh Kumar, apart from two statutory auditors of the PNB.
The agency has till date arrested 12 persons in the case.
Keeping in view the biggest-ever banking fraud in India, the government on Tuesday set a deadline of 15 days for public sector banks (PSBs) to examine all non-performing assets above Rs 50 crore for possible fraud and to identify operational and technical gaps.
"PSB MDs directed to detect bank frauds and consequential wilful default in time and refer cases to CBI. To examine all NPA accounts > Rs 50Cr for possible fraud. Involve ED/DRI for PMLA/FEMA/EXIM violations if any," Financial Services Secretary Rajeev Kumar said in a tweet on the Finance Ministry's Twitter handle
He also said that executive directors and chief technological officers of the PSBs have to prepare a blueprint for combating increasing risks.
With the escalation of the fraud amount, the bank's shares tanked on the bourses. The bank's stocks closed 12.11 per cent down on Tuesday at BSE at Rs 98.35 per share.
Part of Nirav's money trail leading to Delaware in US, says ED source
The Enforcement Directorate (ED), looking at the money trail related to jeweller-designer Nirav Modi, have found it leading to the Delaware state in the United States.
"The agency is probing details of the operations of Nirav Modi's firms in Delaware," an ED source told IANS, adding that all his bank transactions were under the scanner.
Delaware in the US is a tax-free state, attracting a large number of companies from across the coutnry to register there. The ED source said investigators were trying to find out if Nirav Modi had diverted any of the loans raised from Indian banks to the US which had been indicated in the documents they were studying.
They are also looking at whether some shell companies were set up in the US. According to the agency, Delaware hosts about 50 per cent of the US' quoted firms with a tally of 6.5 lakh companies, overall.
Earlier in the day, Firestar Diamond Inc, the US company of Indian billionaire diamond trader Nirav Modi filed for bankruptcy in a New York court, under Chapter 11.
According to a court filing in Southern District of New York on Monday, the firm listed its liabilities in the range of $50 million and $100 million. A Chapter 11 filing under the Bankruptcy Code usually allows a company to reorganise its business.
Modi -- who along with uncle Mehul Choksi of Gitanjali Group is the main accused in the Punjab National Bank fraud -- has been shown as an inventor in details filed against his company registered at 5th Avenue in New York. Mihir Bhansali has been shown as the company Chief Executive Officer and Ajay Gandhi the Chief Financial Officer.
On Monday, a Mumbai special court permitted the ED to issue Letters Rogatory to six countries for identifying and taking steps to seize Nirav Modi's properties in the PNB fraud case.
The ED source official said it is looking for shell companies of Nirav Modi and Choksi in foreign countries, "especially in tax havens".
The agency officials had earlier said over 120 shell companies of both of them in India were under probe.
The ED action comes in the wake of its ongoing fraud probe -- along with the Central Bureau of Investigation -- against the two and many others, including directors of their companies and bank officials.
Modi has been accused, along with his Choksi, of defrauding the Punjab National Bank of Rs 12,600 crore, with Rs 1,300 being added to the fraud kitty on Monday night.
Earlier, the amount stated to have been defrauded by Modi and Choksi companies was Rs 11,300 crore.
The CBI had filed the first FIR in the scam on February 14 against Nirav Modi, his wife Ami, brother Nishal, uncle 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 agency 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 buyer's credit.
Till date 12 persons have been arrested in the case. The ED has attached properties valued by them at Rs 6,000 crore.
(Anand Singh can be contacted at anand.s@ians.in)
