Reeling under the $1.8 billion fraud blow, Sunil Mehta, MD and CEO of Punjab National Bank (PNB) on Thursday said the bank “will not spare anyone” involved in the crime, even as the main political parties started a blame game.
The Enforcement Directorate (ED) on Thursday launched nationwide raids on the offices, showrooms and workshops of billionaire diamond trader Nirav Modi in Mumbai, Surat (Gujarat) and New Delhi.
Nirav Modi, who was featured in Forbes India Rich List of 2013, was described by the magazine as a “third-generation diamantaire” who grew up in Belgium and after dropping out of Wharton moved to India in 1990 — to eventually expand the “Nirav Modi” brandname to 16 stores in Delhi, Mumbai, New York, Hong Kong, London and Macau.
“We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” Mehta told reporters here in a hurriedly called press meet on Thursday.
Guide to Looting India
by Nirav MODI
1. Hug PM Modi
2. Be seen with him in DAVOS
Use that clout to:
A. Steal 12,000Cr
B. Slip out of the country like Mallya, while the Govt looks the other way.
— Office of RG (@OfficeOfRG) February 15, 2018
The fraud saw a major fallout in the political arena. The Congress lashed out at Prime Minister Narendra Modi asking him to “come clean” on the government’s failure to prevent the scam and identify those who helped the kingpin, Nirav Modi, to flee the country. Nirav Modi is said to have left the country on January 1 this year with other accused family members leaving within a week.
Posing a series of questions to the prime minister and his government, the Congress accused the PMO of not taking any action even after a complaint was filed with the prime minister’s Office as early as July 26, 2016.
There are crores of Modis in India.
You will see two prominent ones in this pic.
One sells diamonds and the other, fake promises.
Diamond seller is not related to the other gentleman. They just like to eat pakodas together in Davos
— Ravi Kundurthi (@RaviKundurthi) February 15, 2018
The Rs 11,515 crore fraud had been going on since 2011 at the Brady House branch of the bank but could only be detected on January 25 this year, the PNB chief said, adding that it was reported to the investigative agencies, including the Central Bureau of Investigation (CBI), on January 29.
“We have scanned all our branches also. This is a standalone case in one of our branches. There is nothing (such) in other branches,” he said, adding that he had received a “vague email” from the customers involved in the fraudulent transaction about settling the dues and the bank had asked them to send their detailed response.
The PNB chief said the finance ministry was taking stock of the matter on a day-to-day basis and would “come down heavily in support of booking the culprits”. “We have the capabilities and capacities to come out of the situation,” he said.
Shares of PNB on Thursday continued to drop for the second consecutive day, closing almost 12 per cent lower, after having fallen 10 per cent the first day.
Talking about the modus operandi of the fraud in his letter to bank chiefs, Mehta said that the buyers’ Credit availed against fraudulent letter of undertakings (LoUs) of the bank was used either to retire import bills or replenish the maturing credit of some other banks. The bank staff issued these LoUs on hahalf of companies belonging to Nirav Modi without routing them through PNB’s core banking solution (CBS) system which tracks all bank transactions.
He further added that: “LoUs had not been converted into funded transaction so far, so it is a contingent liability… This matter we will decide after the completion of the investigation. If the investigation process says it is your liability, we will accept it.
#ModiRobsIndia Very simple question to modi ji Why did Modi ji didn’t take any action despite a written complaint being filed on 26th July, 2016? Was the government and the Finance Minister sleeping on their job? pic.twitter.com/gI1vzBv1Jx
— VJ Armaan (@Mehboobp1) February 15, 2018
This is the amount of money Indians lost; ₹ 120,000,000,000.00
While we are still trying to comprehend this, the govt. has the audacity to justify!
If timely action could have been taken rather than ‘just’ words which today have little or no value at all!
— UP Congress (@INCUttarPradesh) February 15, 2018
— Sir Ravindra Jadeja (@SirrrJadeja) February 15, 2018
BJP भ्रष्टाचार का पर्याय बन चुकी है। चाहे ललित मोदी जी हों या विदेश भागने वाले विजय माल्या हों या नीरव मोदी जी हों। सब एक ही बात का इशारा करते हैं कि भारतीय जनता पार्टी अपने को सबसे भ्रष्ट पार्टी बनाने पर तुली हुई है : @dilipkpandey pic.twitter.com/hmzcyBdHjb
— AAP (@AamAadmiParty) February 15, 2018
असल सेवा कुछ ही मित्रों की: इस सरकार की कथनी और करनी में अंतर। सिर्फ़ प्रचार। pic.twitter.com/Ecz27vfxc5
— Sitaram Yechury (@SitaramYechury) February 15, 2018
(The tweets posted above do not reflect the views of LokMarg)