Companies owned by fugitive diamantaire Mehul Choksi have allegedly siphoned off over Rs 6,344.96 crore from the Punjab National Bank (PNB) utilizing fraudulent letters of enterprise and international letters of credit score, the CBI has alleged in its supplementary chargesheet, detailing the company’s three-year-long investigation.
The findings had been submitted by the CBI in a supplementary chargesheet filed earlier than a particular courtroom in Mumbai final week, the place it alleged that the PNB was conned by its staff who had been hand in gloves with Mr Choksi and his firm executives and who facilitated the rip-off as a part of a prison conspiracy.
The PNB officers on the financial institution’s Brady House department in Mumbai issued 165 letters of enterprise (LoUs) and 58 international letters of credit score (FLCs) throughout March-April 2017, towards which 311 payments had been discounted.
These LoUs and FLCs had been allegedly issued to Mr Choksi’s corporations with none sanctioned restrict or money margin and with out making entries within the financial institution’s central banking system to evade any scrutiny in case of a default.
LoUs are a assure given by a financial institution on behalf of its consumer to a international financial institution. If the consumer doesn’t repay to the international financial institution, the legal responsibility falls on the guarantor financial institution.
Based on these LoUs, SBI-Mauritius, Allahabad Bank-Hong Kong, Axis Bank-Hong Kong, Bank of India-Antwerp, Canara Bank-Mamana and SBI-Frankfurt lent cash.
“Since the accused companies did not repay the amount availed against the said fraudulent LoUs and FLCs, the PNB made the payment of Rs 6,344.97 crore (USD 965.18 million), including the overdue interest, to the overseas banks, which had advanced buyer’s credit and discounted the bills against the fraudulent LoUs and FLCs issued by the PNB,” the supplementary chargesheet alleges.
According to the CBI, LoUs value over Rs 3,154.31 crore and the 311 payments value over Rs 3,086.24, which had been discounted towards the 58 FLCs, stay excellent.
The PNB had accused Mr Choksi of duping it to the tune of Rs 7,080 crore. CBI officers stated the matter continues to be below probe and the ultimate figures of loss suffered by the financial institution can solely be decided as soon as all of the LoUs are examined.
The CBI is constant its probe into the LoUs issued in 2015 and 2016 and the fraudulent amendments made in FLCs in 2014, 2015 and 2016 by financial institution officers.
In addition to the 18 accused named within the first chargesheet, the company has named 4 accused in its supplementary report, together with the previous worldwide head of the Gitanjali Group of Companies, Sunil Verma, two PNB officers — single-window operator Sagar Sawant and AGM Sanjay Prasad — and a director of the Gili and the Nakshatra manufacturers below the group, Dhanesh Sheth.
The supplementary chargesheet, filed greater than three years after the primary chargesheet within the case, coincides with the authorized proceedings towards Mr Choksi in a courtroom of Dominica, the place he was arrested for “illegal entry” on May 24 after his mysterious disappearance from neighbouring Antigua and Barbuda.
“This supplementary chargesheet after three years shows that it is only an attempt to cover up anomalies that the defence had pointed out in the first chargesheet. Moreover, the addition of section 201, IPC for destruction of evidence is not legally tenable as a document becomes evidence only after its filing in the court and the allegations are of a period much prior to the FIR,” Mr Choksi’s lawyer Vijay Aggarwal stated.
Mr Choksi was dwelling in Antigua and Barbuda since 2018, after he fled India within the first week of January that 12 months, weeks earlier than the rip-off was reported.
He and his nephew, Nirav Modi, have allegedly siphoned off over Rs 13,000 crore of public cash from the PNB utilizing LoUs and FLCs by bribing officers of the financial institution’s Brady House department.
The company has slapped prices of prison conspiracy, dishonest, breach of belief, disappearance of proof, falsification of accounts, bribery and prison misconduct by a public servant in its supplementary chargesheet.
The CBI probe has discovered that accused PNB official Gokulnath Shetty, in a conspiracy with Mr Choksi, had in an “unauthorised” method issued 165 LoUs from the PNB’s Brady House department between March 1 and April 29, 2017 on behalf of Gitanjali Gems (113 LoUs), Gili India Limited (35 LoUs) and Nakshatra Brands (17 LoUs) — all accused corporations.
The function of this commerce transaction was proven as buying freshwater pearls from Shanyao Gong Si Limited and 4Cs Diamond Distributors, each primarily based in Hong Kong.
The CBI has discovered that the accused corporations availed 142 purchaser’s credit score amounting to Rs 3,011.38 crore and didn’t make funds on the due date “wilfully”, inflicting loss to the financial institution and corresponding income to themselves.
It is alleged that Mr Choksi and Mr Modi used the mechanism to get credit score from international banks, which was not repaid, bringing the legal responsibility of over Rs 13,000 crore on the PNB.
The investigation has additional revealed that the fraud was allegedly perpetrated regardless of circulars issued by the Reserve Bank of India (RBI), which was within the information of senior PNB officers.
Further, the PNB officers didn’t implement the circulars and warning notices issued by the RBI relating to safeguarding the SWIFT (worldwide banking messaging system) operations and as a substitute, misrepresented the factual scenario to the RBI, the company has alleged.
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