Sebi warns PNB for late disclosures regarding Nirav Modi scam

The PNB was defrauded of over USD 2 billion allegedly by diamond trader Nirav Modii and his associates by fraudulent use of Letters of Undertakings (LoUs) and Foreign Letters of Credit (LoC).

Published: 17th May 2018 03:05 PM  |   Last Updated: 17th May 2018 05:37 PM   |  A+A-

PNB fraud case

A file image of security guards standing inside a Nirav Modi showroom during a raid by the Enforcement Directorate. (Photo | Reuters)

By PTI

MUMBAI: PNB said today that markets regulator Sebi has warned it for the delay in disclosures to stock exchanges about the USD 2 billion fraudulent transactions allegedly carried out by Nirav Modi and Gitanjali Group of companies.

Taking serious note of delay in making disclosures, Sebi has issued a warning letter to state-owned Punjab National Bank -- the country's second-largest lender.

The PNB was defrauded of over USD 2 billion allegedly by diamond trader Nirav Modii and his associates by fraudulent use of Letters of Undertakings (LoUs) and Foreign Letters of Credit (LoC) in connivance with certain bank officials.

"The non-compliances are viewed seriously and PNB is hereby warned and advised to be cautious in future to ensure compliance with all applicable provisions of the SEBI LODR (Listing Obligations and Disclosure Requirements) Regulations," Sebi said in a communication to the bank.

The Sebi's warning letter has been posted by the bank on stock exchanges as part of the regulatory filing.

Sebi observed that there were delays of 1-6 days by PNB in making disclosures to the stock exchanges pertaining to the filing of reports/complaints with Reserve Bank of India and CBI.

Accordingly, PNB has not complied with various norms.

The Sebi's communication refers to various disclosures made by PNB to stock exchanges during February and March this year regarding certain fraudulent transactions with respect to Nirav Modi group, Gitanjali group and others and referring of the same to law enforcement agencies.

Earlier this week, CBI filed two charge sheets in the Nirav Modi fraud case in a Mumbai court.

Besides others, the charge sheet names two executive directors of the PNB and its former CMD Usha Ananthasubramanian.

Ananthasubramanian is currently CEO and MD of another state-owned lender Allahabad Bank.

These officials have been divested of all their functional powers.

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