New Delhi, February 27, 2018 (TMC Desk) 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.