Punjab National Bank (PNB) officials declared yesterday that they have unearthed a series of fraudulent transactions that had been conducted by global designer and jeweller Nirav Modi in collusion with some bank employees by defrauding the national bank to the tune of Rs. 11,000 crore.
The bank claimed that some of its staff members from a branch in Mumbai had issued fraudulently prepared Letters of Undertakings (LOUs) on behalf of Nirav Modi’s firms, allowing them to raise short-term funds through overseas branches of Indian banks for the purpose of importing unpolished diamonds and precious stones. On the basis of these fake LoUs, PNB staffers misused global money transfer facilities to take money from branches of Allahabad Bank and Axis Bank to sent it all to overseas accounts without leaving traces behind.
The bank also reported that a similar modus operandi had been used by other companies like Mehul Choksi-promoted Gitanjali Gems to fraudulently obtain money from banks via fake LoUs. These transactions indicate clear criminal conspiracies involving some businessmen and bank officials for defrauding the commercial banking and financial systems of India.
PNB managing director Sunil Mehta addressed a press conference today where he explained that his bank had detected these fraudulent transactions on 3 January this year and had intimated the Central Bureau of Investigation (CBI) about it on 29th after carrying out internal investigations.
CBI, in turn, registered a formal FIR against Nirav Modi and certain PNB staff members the very next day and began its investigations with support from other investigation agencies like the Enforcement Directorate (ED) and the Economic Offences Unit (EOU). Media reports claim lookout notices have been issued against Modi, who is said to have left the country early last month.
Details of these shocking disclosures caused a political storm after Congress and other other opposition parties slammed the Modi government, accusing it of letting Nirav Modi escape scot free like Lalit Modi and Vijay Mallya after committing massive scams. Rahul Gandhi took to Twitter to even suggest collusion between Nirav Modi and Prime Minister Narendra Modi in these events.
Although there was no official government response over this issue at this point of time, some senior BJP leaders, including defence minister Nirmala Sitharaman, said the Congress-led UPA government is to be blamed for this scam as it all happened under its rule in 2011.