Nirav Modi PNB Scam updates – What is Punjab National Bank Fraud case involving Nirav Modi and Mehul Choksi?
On 29 January 2018, The Punjab National Bank filed a case alleging Nirav Modi of fraud worth over Rs.13,000 crores through loan issued by PNB at its Brady House branch in Fort, Mumbai. The fraud was allegedly done by jeweler and designer Nirav Modi, brother Nishal Modi and Uncle Mehul Choksi. Nirav, his wife Ami Modi, brother Nishal Modi and Uncle Mehul Choksi, few PNB officials and employees, and directors of Nirav Modi and Mehul Choksi’s firms have been named in the charge sheet filed by the CBI. Nirav Modi and his family escaped from India in early 2018, days before the news of the scam broke in India. They clearly got a whiff of it somehow. The Nirav Modi-PNB scam is not the first and last case despite elaborate checks by the regulators. The case of Nirav Modi and the Punjab National Bank has thrown up the issue of infirmity of banks to frauds. Don’t miss to read out as to how PNB scam unfolded at the bottom of this article.
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Nirav Modi PNB Scam updates
- On 27th June, a UK court has extended the remand of Nirav Modi till 25th July 2019. He has been lodged at Wandsworth prison in south-west London since his arrest in March 2019.
- ED seized four Swiss bank accounts belonging to Nirav Modi and his sister, Purvi Modi containing Rs. 283.16 crores on 27th June 2019. Swiss authorities froze the accounts after a request from ED, who confirmed the money represented “proceeds of a crime”.
- In the case, ED has reportedly previously seized diamonds, gold, jewellery, paintings and properties worth around Rs.7000 crores.
- Nirav Modi’s has been in a London jail and his bail plea has been rejected four times.
- Gaston Browne, Antigua Prime Minister, has said that Mehul Choksi’s citizenship will be revoked once he has exhausted all the legal options.
- Two apartments of Nirav Modi in USA worth Rs.637 crores were seized in October. A London flat worth approx. Rs. 56.97 crore was also seized.
- The Enforcement Directorate began attaching assets of the Modi and is seeking seizure under the Fugitive Economic Offenders Ordinance.
- In response to the request of Choksi’s lawyer for suspension of the red corner notice for some time to enable Choksi to travel to Miami for medical treatment, the Bombay High Court asked them to submit a fresh health report to determine whether he is medically fit to travel to India through air ambulance.
- Since, there is a red corner notice against Choksi, the moment he lands in the US, the authorities can exercise a section in the bilateral treaty between the two nations to deport him to India.
- Mehul Choksi was found to have acquired the citizenship of Antigua with whom India has no bilateral treaty.
- On 13 June 2018, CBI approached the Interpol to issue a red corner notice (RCN) against Nirav Modi’s brother Nishal.
- CBI sent a request to Interpol to issue an RCN against Nirav Modi and Mehul Choksi of the Gitanjali Group.
- As of 18 May 2018, the scam was worth ₹14,356.84 crores (US$2.1 billion).
- In March 2018, then Finance Minister Arun Jaitley informed Rajya Sabha that Nirav Modi created his first fraudulent transaction from PNB on March 10, 2011.
- Nirav Modi is on the Interpol’s wanted list for criminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, money laundering since February 2018.
- In January 2018, Nirav Modi, his wife, his uncle Mehul Choksi and other members of the family flew just before the scandal broke. Nirav was later noticed by a foreign media and was later arrested in London. He has been jailed since then and four of his bail pleas have been rejected till date.
Nirav Modi PNB Scam updates – How the PNB scam came to light
- The case of alleged scam came to light after Nirav Modi’s company sought a fresh loan. The old PNB official with whom they had allegedly been working had retired.
- As there was no sanctioned limit in the name of any of Modi’s companies, the new official asked for 100 percent cash margin to issue LoU. When Modi’s companies insisted to have used the facility before, the official started digging.
- The new official noticed the fraud on January 16, dug out more details and on 29th January he wrote to CBI naming two PNB officials. The letter also had mentioned that Modi claimed to have required the cash to pay his import bills, but the amount of Rs.280 crore raised earlier was not used for the purpose.
- As per the terms of the LC, PNB would pay overseas suppliers on behalf of Nirav Modi’s companies within a certain period and recover the money later from Modi. If the client is unable to return the money at the end of the LC tenure, the bank may extend the LC.
Nirav Modi PNB Scam updates
- The bank initially said that two employees for its bank were involved in the scam, as the bank’s core banking system was bypassed when the corrupt employees issued LOUs to overseas branches of other Indian banks.
- On a later date, CBI filed charge sheet against officials Usha Ananthasubramanian, former CEO of PNB, executive directors KV Brahmaji Rao and Sanjiv Sharan finding them responsible for failure to implement several circular and caution notices issued by the RBI regarding the reconciliation of SWIFT messages and core banking systems.
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