CBI arrests three people in PNB Scam

Janjivan Bureau / NEW DELHI : The CBI has registered a fresh FIR against Gitanjali Group promoter Mehul Choksi in connection with alleged fraud in the issuance of Letters of Undertaking (LoU) worth ₹11,400 crore from Punjab National Bank (PNB), officials said on Thursday.
The CBI has alleged that the new FIR pertains to 143 LoUs worth over ₹4,886 crore fraudulently issued to three companies of Mr. Choksi — Gitanjali Gems, Nakshatra and Gili — during the period 2017-18. The agency had earlier registered a separate case involving ₹280-crore fraud, which has now been expanded to cover LoUs worth ₹6,498 crore issued to accused companies of Mr. Nirav Modi and Mr. Choksi.
The arrests late on Friday come amid an intensifying probe involving various authorities after India’s second-largest state-run lender said on Wednesday it had been hit by massive scam.
The two bank employees who were arrested, Gokulnath Shetty and Manoj Kharat, are suspected of steering fraudulent loans to companies linked to billionaire jeweller Nirav Modi and to entities tied to jewellery retailer Gitanjali, which is led by Modi’s uncle, Mehul Choksi.
The accusations against the two relatively junior officials at PNB were detailed in the lender’s disclosure, and were also contained in a preliminary police report.
Police also arrested a third person, Hemant Bhat, whom the source described as the “authorised signatory” of the companies tied to Nirav Modi.
All three are being questioned, and will appear in a Mumbai court later on Saturday, the source said, adding an “examination of others is continuing.”
The whereabouts of Modi, whose high-end jewellery has been worn by Hollywood stars including Kate Winslet, is unknown.
The Income Tax Department has also extended a probe into Modi and his group companies, looking into possible tax evasion and suspected investment of illegal funds, a spokeswoman told on Saturday.
The spokeswoman said 29 properties and 105 bank accounts of Nirav Modi and his group companies had been seized.
Central Vigilance Commission, which investigations corruption in the government, has summoned senior officials of the Reserve Bank of India and the Finance Ministry to assess how all internal checks and balances failed to detect the fraud. PNB officials were also summoned, the report said, citing an official aware of the development.