PNB fraud: CBI quizzes bank officials, issues LOCs against 10 Gitanjali Group executives

The Central Bureau of Investigation said on Monday it questioned Punjab National Bank (PNB) executive director KV Brahmaji Rao, two general managers and a retired official in connection with its probe into the Rs 11,400 crore fraud.

A Central Bureau of Investigation official said the agency questioned Rao for the third consecutive day at its Mumbai branch. On Sunday, too, Rao was questioned for over eight hours. He was quizzed along with PNB managing director and CEO Sunil Mehta on Saturday.

Others quizzed were three general manager-rank officials of the PNB treasury division and international banking division, including a retired official.

An informed source said the CBI had issued more than 10 look out circulars (LOCs) against executives of Nirav Modi and Mehul Choksi’s Gitanjali Group who have not joined the probe yet.

According to CBI officials, the general manager of the international banking division used to get daily reports on all credits and debits of the bank’s Nostro accounts.

The source said the CBI also carried out searches at the Mumbai office of Cyril Amarchand Mangaldas last week.

“During searches at Nirav Modi’s office and premises, the agency seized a few documents. On the basis of those, the CBI carried out searches at the law firm and collected more documents.”

The source said the firm was involved in a banking assignment from Modi a few weeks before the scam was uncovered. The firm had never dealt with Nirav Modi or his companies prior to this, the source said.

CBI spokesperson Abhishek Dayal said: “Investigation is underway. CBI director Alok Kumar Verma has directed probe officers to take all steps to ensure the investigations are concluded within given time frame.”

“He (Verma) directed officers not to spare anyone found involved in these scams,” Dayal added.

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. 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 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 Understanding and Foreign Letters of Credit, which were then withdrawn by Nirav and Choksi’s group as buyers’ credit.

The agency has to date arrested 12 in the case.