I-T SLEUTHS QUESTION PNB MD

Vipul Ambani, top Fire Star exec, held

Income tax officials on Tuesday questioned Punjab National Bank Managing Director and Chief Executive Officer Sunil Mehta in the bank fraud allegedly involving Nirav Modi and the Mehul Choksi group of companies. “The I-T department came to the PNB headquarters for questioning, which went on for hours,” said a source.

Income tax (I-T) officials on Tuesday questioned Punjab National Bank (PNB) Managing Director and Chief Executive Officer Sunil Mehta in the ~114 billion scam allegedly involving Nirav Modi and the Mehul Choksi group of companies. “The I-T department came to the PNB headquarters for questioning that went on for hours,” said a source.

Meanwhile, the Central Bureau of Investigation (CBI) arrested Vipul Ambani, the president (finance) of Modi's Fire Star Diamond, the first high-profile arrest in the case, officials said. Four other senior executives were also arrested by the agency in connection with two FIRs registered by it in the scam, they said.

Ambani was arrested along with executive assistant Kavita Mankikar and senior executive Arjun Patil in connection with the first FIR registered by the agency, in which 150 letters of undertaking (LoUs) worth ~64.98 billion are under probe. Mankikar was also the authorised signatory of three firms — Diamond R US, Stellar Diamond, Solar Exports — listed as accused in the FIR registered by the agency on January 31, they said. The remaining two — Kapil Khandelwal, the CFO of the Nakshatra group and Gitanjali group, and Niten Shahi, the manager of Gitanjali group — were also arrested on Tuesday in connection with the second FIR registered by the agency on February 15 against Mehul Choksi and his three firms.

The CBI also questioned an executive director of the PNB along with nine other officials, sources said.

Meanwhile the three PNB officials arrested on Monday — Bechhu Tiwari, Yashwant Joshi and Praful Sawant — were sent to CBI custody till March 3 by a special CBI court in Mumbai, officials said.

Tiwari, Joshi and Sawant were entrusted to cross-check and verify intimations sent to SWIFT messages and upload them on PNB's core banking solutions system on daily basis which they allegedly did not do. Gokulnath Shetty and Manoj Kharat, arrested earlier, allegedly sent messages of the LoUs using an international messaging system for banking systems called SWIFT, but did not make entries in the bank's system to avoid detection.

The I-T department also raided 20 premises linked to Gitanjali Gems promoter Choksi and associated firms in connection with a tax evasion case, official sources said. They said the searches were conducted in Mumbai, Pune, Surat, Hyderabad, Bengaluru and few other cities against 13 companies linked to Choksi and Gitanjali Gems. It also slapped fresh charges under the new anti-black money law against Modi, for allegedly holding an illegal asset abroad, sources said.

The I-T department also issued a notice to Anita Singhvi, the wife of senior Congress leader Abhishek Manu Singhvi, asking her to explain about certain jewellery purchases, amounting to ~60 million, allegedly from a showroom owned by Modi. Singhvi refuted the allegations against his family and described the action as "harassment". The Congress said it would talk to other like-minded parties to demand answers from the government in Parliament on the state of the banking sector in the country.

Searches by the Enforcement Directorate (ED) continued for the sixth day, with its chief Karnal Singh cancelling his scheduled visit to France so he could personally monitor the probe. "Assets worth ~100 million were seized during searches at 13 premises linked to Modi and Choksi," an ED official said.

The CBI questioned eight senior executives of Modi's firms and 10 of the Gitanjali group, an official said.

Meanwhile, the Supreme Court will on Wednesday hear a plea seeking an SIT probe and the billionaire’s deportation in the case. The billionaire’s lawyer questioned reports that his client had fled the country. “Everybody is saying that Nirav Modi has run away. Why would anyone flee, leaving assets worth ~5,000-6,000 crore (~50-60 billion) for the Enforcement Directorate (ED) to recover," advocate Vijay Aggarwal, who represents Modi, said.