Billionaire jeweller Nirav Modi has refused to join the CBI investigation in the USD 2 billion fraud in Punjab National Bank citing his business engagements, prompting the agency to issue a stern letter on Wednesday asking him to appear before it next week. Meanwhile, the CBI has arrested PNB’s internal chief auditor M K Sharma– a chief manager-ranked official– in connection with the case, they said, adding that it is first arrest of any auditor of the bank. Sharma, a scale-IV officer, was responsible for auditing the systems and practices of the bank’s Brady House branch– from Letters of Undertakings (LoUs) were issued– and report the deficiencies with zonal audit office, they said. Meanwhile, in a terse letter, the CBI “directed” him to approach the Indian mission in the country where he is residing so that immediate arrangement can be made for his travel to India, officials said.
The agency has told him that it is mandatory for an accused to join the investigation whenever they are asked to, they said. He has been asked to appear for questioning next week, they said. The agency had earlier asked Modi on his official email id to join the investigation related to Rs 12,636 crore scam pertaining to fraudulent issuance of the LoUs and Letters of Credit (LCs) from Brady House branch of PNB in Mumbai in favour of his and his uncle Mehul Choksi’s companies, they said.In response, Modi refused to join the investigation saying he has businesses abroad because of which he cannot return, they said. The probe agency officials has said the quantum of the alleged fraud perpetrated in the bank by billionaire jewellers Modi and Choksi stands close to USD 2 billion after the teams of the CBI and PNB found fresh LoUs and LCs worth Rs 1,251 crore related to Choksi’s Gitanjali group of companies.
The PNB had earlier put the defrauded amount at Rs 11,394.02 crore (USD 1.77 billion). The LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant a short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to credit giving bank along with accruing interest. It is alleged that LoUs and LCs worth close to USD 2 billion were issued to the companies of uncle-nephew duo of Choksi and Modi from the Brady Road branch of the bank through SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages. These messages were allegedly not entered in the banking software of the PNB to bypass surveillance.
