NEW DELHI: A day after Punjab National Bank reported fraudulent transactions worth Rs 11,400 crore involving billionaire diamond jewellery designer Nirav Modi, its top management on Thursday was busy firefighting, assuaging the concerns of customers and assuring investors saying it would do everything possible to book the culprits.
While the bank had sought to shift the onus to other banks with international branches that honoured fake Letters of Understanding (LOU) in favour of the accused, the Reserve Bank of India reportedly directed PNB to pay the entire Rs 11,400 crore to counterparty lenders, giving it no room to wriggle out of the crisis.
PNB’s CEO Sunil Mehta claimed the fake LOUs have not been converted into funded transaction so far. “So, it is a contingent liability... We will decide on the matter after the completion of the investigation. If the investigation process says it is your liability, we will accept it.”
With the scam spinning out of control, the Enforcement Directorate on Thursday raided 17 locations and seized gold, diamonds and jewellery tentatively worth Rs 5,100 crore and sealed six locations owned by Nirav Modi’s companies.
According to the ED, the valuation process is still on and the figure could go up. All offices of Nirav Modi in Mumbai, Delhi, Jaipur, Hyderabad and Surat were searched after the ED registered a case under the Prevention of Money Laundering Act on Wednesday late night.
The CBI, too, got cracking with officials saying it issued a lookout circular against Nirav and his relatives after the first FIR was registered against them. The entire family left India in the first week of January. CBI sources said the agency is likely to file two fresh FIRs by Friday evening and the figure of Rs 11,400 could shoot up.
On the political side, the Congress tried to milk the crisis, saying Bengaluru-based whistleblower Hari Prasad had alerted the Prime Minister’s Office way back in 2016 on the financial frauds committed by Mehul Choksi’s Gitanjali Gems Ltd over the years. Choksi is related to Nirav. Prasad’s letter cited over 20 FIRs against Gitanjali for bounced cheques.
A group photo with Narendra Modi in Davos with Nirav in the frame became the talking point of the day with the BJP at pains to clarify he was no part of the PM’s delegation.
Bank bytes
PNB will take full-capacity action against wrongdoers; has already suspended 10 officers, says Sunil Mehta, PNB CMD
Assures that bank will honour all its bonafide commitments. “We want to convey to all our stakeholders that PNB is pursuing clean banking agenda as a responsible bank”
Bank asks Nirav to come to India and give a written debt repayment plan in person
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