PNB Fraud: CBI questions former top PNB, ICICI Bank officers

With the Central Bureau of Investigation (CBI) digging into billionaire jeweller Nirav Modi and his uncle Mehul Choksi, more muck is being found behind the glittery world. The CBI on Tuesday stated that Punjab National Bank (PNB) has informed them that the amount of fraud is more than the earlier internal calculation. The Bank informed the probing agency that the they have found further scam of Rs 1, 251 crore with respect to Gitanjali Gems. The agency in now investigating a scam totaling Rs 12, 636 crore, against the earlier amount of Rs 11,421 crore as mentioned by the Bank.

To unravel the larger conspiracy hatched by these two jewellers, the agency questioned two top officers of two banks — ICICI Bank and Punjab National Bank — on Tuesday.

The CBI said that they have examined NS Kannan, Executive Director, of ICICI Bank, and PNB's former managing director Usha Ananthasubramanian in Mumbai. Apart from them, the CBI questioned two PNB international banking division general managers Nihal Ahad and Vimlesh Kumar.

Ananthasubramanian is currently the managing director and CEO of Allahabad Bank, and she was the MD and CEO of PNB from August 2015-May 2017, and was the first woman chairperson of IBA. She was quizzed with respect to letter of undertakings (LoU) and foreign letter of credits (FLC) given to Nirav and Choksi firms.

The CBI said that they have examined Kannan, pertaining to another set of loans of Rs 5,208 crore, given to Gitanjali Group in 2016.

ICICI is the leader of consortium of banks that lend money to Gitanjali Group of Companies. ICICI Bank alone had given a loan of Rs 773 crore.

The CBI during raids at Choksi residences and offices found that another consortium of 34 banks.

On Monday, the agency grilled three general managers of the international banking and treasury divisions of the PNB along with executive director KV Brahmaji Rao. The agency questioned Rao for three days. The CBI stated that the general managers working with the international division are being questioned as they used to get daily reports of credit and debits of Letters of Undertaking, while managing the nostro account (foreign-currency account that a lender holds with another overseas bank).

The agency had also questioned several statutory auditors of PNB as they wanted to find out how they failed to detect the fraud that went on for six years. "It is quite surprising that a few people, including a clerk, could continue issuing letters of undertaking of vast amounts without any checks and balances by auditors," said the agency.

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.