PNB ropes in forensic auditor for fraud case

Punjab National Bank (PNB) has appointed Belgium-based consultancy firm BDO as forensic auditor for five of Nirav Modi Group companies that lead to the biggest ever banking fraud of $2 billion in the country.

Besides, more than two dozen banks have decided to seek a forensic audit to establish if Mehul Choksi-led Gitanjali Gems has also indulged in fraud.

PNB issued a formal appointment letter to the Belgium-headquartered audit firm yesterday, sources said.

"It shall be our endeavour to exercise every bit of diligence in executing this assignment, given its sheer scale and complexity. It will be our responsibility to deliver the same within the required time frame in the larger national interest and that of banking industry in particular," BDO India Partner and Head - Risk and Advisory Services Kartik Radia said in a statement today. The Central Bureau of Investigation (CBI) on Wednesday arrested an auditor of PNB Brady House branch, which is at the centre of an alleged $2 billion fraud, a police spokesman said, bringing the number of bank employees held to seven as the investigation widens.

CBI said the arrested auditor, M.K. Sharma, was “allegedly responsible for auditing the systems and practices” of PNB’s Brady House branch in Mumbai and for reporting any problems to the zonal audit office. Sharma will appear in a Mumbai court on Thursday, the spokesman added.

Tighter norms

The Union Cabinet is likely to consider on Thursday measures to strengthen the regulatory regime for auditors to prevent such incidents in the future.