Officials illegally accessed Level-5 SWIFT password, shared with firm
PNB FRAUD: Enforcement Directorate raids over 40 locations in several cities
NEW DELHI: A former deputy manager of Punjab National Bank (PNB), arrested in the fraud case, has told investigators that he had unauthorisedly obtained Level-5 password to the SWIFT system to authorise issuance of money through Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs).
Gokulnath Shetty made the startling revelations when sleuths of Central Bureau of Investigation questioned him about the modus operandi of providing guarantee to other banks under the LoUs and issuance of enhanced FLCs.
He also told the investigators that he shared the password with other individuals, essentially employees, as well as directors of Nirav Modi’s company.
The Level-5 password was the key allowing him to reach out to several banks to release the money to the Nirav Modi and Gitanjali groups through the SWIFT system, which, according to PNB amounted to a fraud of Rs 11,300 crore.
SWIFT or Society for Worldwide Interbank Financial Telecommunication, headquartered in Belgium, provides a network to enable financial institutions to send and receive information about financial transactions in a secure and standardised manner.
An LoU is a guarantee by the bank that should the borrower default on repayment, it would pay back the money to the original lender. An FLC is a sort of guarantee to a third part or vendor that money for the goods supplied would be paid.
Meanwhile, the CBI on Monday continued examining several PNB officials, besides questioning four employees of diamond merchant Nirav Modi’s firms including Vipul Ambani and Ravi Gupta, both Chief Financial Officers, Saurabh Sharma, President, Finance Division and Subhash Parab, Finance Executive in connection with the multi-crore bank fraud, an official said.
The CBI examined Ambani and 13 PNB officials, including some up to then General Manager rank officials, to find out about the irregularities in fraudulent issuance of LoUs and FLCs in favour of companies of Nirav Modi and his uncle Mehul Choksi.
Ambani, son of Dhirubhai Ambani’s younger brother Natubhai Ambani, was also questioned by the CBI officials on Sunday for over eight hours in Mumbai. He is the CFO of Nirav Modi’s firm Firestar.
The agency has also sealed the bank’s second largest outlet — Brady House Branch in Mumbai — where the fraud had taken place.
On Monday the Enforcement Directorate conducted searches at over 40 more locations in several cities across India in connection with the scam, an official said.
The agency raided 10 places in Mumbai, six each in Ahmedabad and Bengaluru, four in Chennai, three in Surat, two each in Bihar, Lucknow, Jalandhar and Hyderabad and one in Delhi. The raids are also being carried out at diamond merchant Nirav Modi’s house in Mumbai’s Worli.
Following the unravelling of the fraud, two senior officials of Gitanjali Gems — Chandrakant Karkare and Pankhuri Warange — resigned from the company, according to a regulatory filing with the stock exchanges on Monday.
The names of the two officials were mentioned in the FIR filed by the Central Bureau of Investigation on the fraud.