PNB scam keeps growing, nears ₹13,000 crore mark
NEW DELHI: India’s biggest bank fraud accused Nirav Modi’s international jewellery business has filed for bankruptcy in the US.
Firestar Diamond, Inc filed the Chapter 11 petition in the New York Southern Bankruptcy Court on Monday, according to the court filing.
The case has been assigned to Judge Sean H. Lane, and an “order for relief entered”.
Firestar Diamond, which on its website states that its operations span the US, Europe, the Middle East, the Far East and India, blamed liquidity and supply chain challenges.
It listed up to USD 100 million in assets and debt, the court document said.
Meanwhile, the size of the PNB scam just keeps growing.
Punjab National Bank has said that the alleged fraud perpetrated by jewellers Nirav Modi and Mehul Choksi may be around USD 2 billion, ( nearly Rs 13,000 crore over USD 204 million more than previously estimated.
In a late night filing to stock exchanges, the state-owned lender said that “the quantum of reported unauthorised transactions can increase by USD 204.25 million.”
The bank had earlier put the defrauded amount at Rs 11,394.02 crore (USD 1.77 billion). Adding another Rs 1,323 crore would take this to Rs 12,717 crore.
PNB said it had not received any instruction from the government to compensate other lenders for losses arising out of the fraud.
It is also learnt that Nirav’s uncle Mehul Choksi has owes public sector banks in excess Rs 14,000 crore.
The Finance Ministry on Tuesday directed public sector banks (PSBS) to probe all NPA accounts of over Rs 50 crore for possible fraud and accordingly report the cases to CBI.
Besides, other PSBS too have approached investigating agencies as borrowers (as in the case of Rotomac Group and Simbhaoli Sugars) have not returned loans.
Financial Services Secretary Rajiv Kumar, in a tweet, informed that man- aging directors of PSBS have been directed to detect bank frauds and refer cases to the CBI.
State-owned banks, with combined gross non-performing assets (NPAS) of about Rs 8.5 lakh crore, have been asked by the ministry to go in for prompt fraud identification and take action within prescribed deadlines.
The Enforcement Directorate (ED) on Tuesday moved a special court here, seeking issuance of a non-bailable warrant (NBW) against diamond trader Nirav Modi.
On Monday, the court, set up under the Prevention of Money Laundering Act, had allowed the central agency’s plea seeking issuance of Letters Rogatory (LRS) to six countries for obtaining information about the overseas businesses and assets of the diamantaire.
Meanwhile, the CBI on Tuesday said it had questioned former Punjab National Bank Managing Director Usha Ananthasubramanian and ICICI Bank Executive Director N.S. Kanan in connection with it’s over Rs 12,600 crore bank fraud case.
A CBI official said Ananthasubramanian was quizzed at the agency’s Mumbai office.
Ananthasubramanian is currently the CEO and MD of Allahabad Bank and also the chief of Indian Banks Association.
“The agency also questioned the ICICI Bank Executive Director because it was the leader of a consortium of banks that sent money to Mehul Choksi’s Gitanjali Group,” the official said.