PNB case: ED files charge sheet against Nirav, others
FRAUD PROBE Case filed before special court under antimoney laundering law MUMBAI:
The Enforcement Directorate (ED) on Thursday filed its first charge sheet in the over $2 billion Punjab National Bank (PNB) fraud case involving diamantaire Nirav Modi and his associates, officials said.
They said the about 12,000 page charge sheet or the prosecution complaint has been filed before a special court under various sections of the Prevention of Money Laundering Act (PMLA).
They added that the criminal complaint has only been filed against Nirav Modi, his associates and businesses and the entire gamut of issuance of fake letters of undertaking (LoUs) by Punjab National Bank to his firms in alleged connivance of bank officials.
It is expected that the agency would file a second charge sheet against Modi’s uncle, the jeweller Mehul Choksi and his businesses.
The charge sheet also details the attachments made by the agency against Modi and his associates in the last few months after it first registered an FIR (first information report) in this case on February 14.
The Central Bureau of Investigation (CBI) had early this month filed two charge sheets in this case.
Modi, who is absconding and has not joined the Enforcement Directorate probe in the case till now, and others are being probed under various criminal laws after the fraud came to light this year following a complaint by Punjab National Bank that they allegedly cheated the nationalised bank to the tune of over ₹13,000 crore, with the purported involvement of a few employees of the bank.
PNB this month reported a ₹13,417 crore loss for the January-March period—the largest quarterly loss posted by an Indian lender—reeling under fraud, tighter loan classification norms and losses in its bond portfolio.
Rating agencies have downgraded PNB, citing capital concerns following the fraud involving companies linked to Nirav Modi and Mehul Choksi.
PNB has estimated its total exposure to group firms of Modi and Choksi, including letters of undertaking and other credit exposure, at ₹14,356 crore.
PNB has provided for half of this amount in the March quarter and said the remaining half would be spread across the three quarters of 2018-19.
Ratings agency Moody’s, which on Monday downgraded PNB’s rating, expects that the state-run bank will receive capital support from the government and that the bank will be able to release some capital from the sale of its non-core assets such as real estate and partial stake sale in PNB Housing Finance Ltd.
Moody’s expects that Punjab National Bank will receive capital support from the government and that the bank will be able to release some capital from the sale of its non-core assets such as real estate and partial stake sale in PNB Housing Finance Ltd.
“Nevertheless, these sources will unlikely prove sufficient to restore the bank’s capitalization to levels before the fraudulent transactions were discovered,” Moody’s had said while announcing the downgrade.
The Enforcement Directorate charge sheet focuses on the money laundering aspect and the role of Nirav Modi and others in perpetrating the alleged fraud, a senior official said.
Both Nirav Modi and Choski are said to have left the country before criminal cases were lodged against them.