PNB Detects New Fraud of Rs 9.1 Crore at Same Mumbai Branch Where Nirav Modi Scam Unfolded
The new fraud of Rs 9.1 crore was allegedly perpetrated by Chandri Paper and Allied Products Pvt Ltd, a little known company based in South Mumbai's Masjid locality.
Mumbai, Mar 15: The Punjab National Bank, which is already facing flak over the late detection of scam perpetrated by Nirav Modi-linked firms, detected another financial fraud amounting to Rs 9.1 crore.
The case came to light on Thursday, when a Reuters report quoted the CBI complaint which revealed the latest fraud detected at PNB's Brady House branch in Mumbai -- which is at the centre of Rs 12,600-crore scam involving diamond czar Nirav Modi.
The new fraud of Rs 9.1 crore was allegedly perpetrated by Chandri Paper and Allied Products Pvt Ltd, a little known company based in South Mumbai's Masjid locality.
In the latest case, the CBI complaint said two PNB officials at the Brady House branch entered into a "criminal conspiracy" with Chandri Papers to issue fraudulent Letter of Undertakings (LoUs) in April 2017.
The Brady House branch, from where the LoUs were also issued in the Nirav Modi case, was sealed by the CBI last month, after the scandal came to light.
The branch's former deputy manager, Gokulnath Shetty, charged as key facilitator of the scam, has been arrested by the CBI, along with a dozen more officials of the bank.
A non-bailable warrant has also been issued against Nirav Modi and his maternal uncle Mehul Choksi, who owns the Gitanjali Gems. Firms linked to Choksi were also beneficiaries of the scandalous LoUs issued by the bank.
The duo left the nation in the first week of January, days before the CBI registered the case. Their current location has not been confirmed.
In a bid to prevent similar scams in the future, the Reserve Bank of India barred state-run lenders from issuing LoUs - used as an immediate credit instrument by the bearers. The banks, in such cases, act as guarantors to loans availed by the LoU bearer from any bank or financial institution.
(The above story first appeared on LatestLY on Mar 15, 2018 12:12 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).