Published: Thu, May 17, 2018
Global | By Marsha Munoz

Nirav Modi scam: CBI files 2nd charge-sheet, names Gitanjali Gems and Choksi

Nirav Modi scam: CBI files 2nd charge-sheet, names Gitanjali Gems and Choksi

PNB Housing Finance dethroned its fraud-hit parent Punjab National Bank (PNB) in terms of market capitalisation for the first time ever on Wednesday.

The lender also said that it paid Rs 6,586.11 crore to other banks to discharge its liabilities related to Letter of Undertakings (LoUs) and Foreign Letter of Credits (FLCs) issued in the unauthorized manner to favor some overseas branches of Indian banks through the fraudulent use of SWIFT system of the bank, which was not integrated with CBS (core banking solutions).

In connection with the pleas filed on the Gitanjali Gems in the court, the ED said, "The Company cleverly veils any reference to Mehul Choksi, who left India in the twilight of the scam coming to the notice of the law enforcement agencies".

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Police on Monday charged 22 people, including a former head of PNB and two of its current executive directors.

The CBI today filed chargesheet against billionaire jeweller Mehul Choksi and 17 other entities, including companies owned by him and other individuals, in connection with the over 2 billion USA dollars Punjab National Bank (PNB) scam. The bank will make payments to the concerned banks on the due dates of LOUs/FLCs, PNB said.

Incidentally, BDO India LLP, the firm engaged by PNB to conduct a forensic investigation into the fraud committed by Modi and his companies, has also shared its findings with the United States bankruptcy court. Ananthasubramanian was earlier with the PNB. According to the company, the profit during the quarter under review increased to Rs 219.2 crore from Rs 152.4 crore reported for the corresponding period of previous year.

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Tighter RBI rules announced in February, which did away with half a dozen loan restructuring schemes, have led to banks reporting a surge in bad loans in the March quarter, and several of them reporting losses.

PNB said it had allocated 71.78bn rupees to pay around half the amount it owes in the three months to March 31, while setting aside the other 50pc over the next three quarters.

The quarterly loss of Rs 13,416 crore was attributed mainly to higher provisioning particularly to account for bad assets rising more than three-fold from Rs 4,910.39 crore to Rs 16,202.82 crore. Out of this, the much talked about Nirav Modi scam accounted for about Rs 7580 crore, meaning the bank's lending moves left a lot to be desired.

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"PNB may also be restricted to conduct normal business".

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