NEW DELHI: Billionaire jeweller Nirav Modi, Allahabad Bank MD and CEO Usha Ananthasubramanian and 20 others have been charge-sheeted by the Central Bureau of Investigation (CBI) in connection with fraudulent guarantees of Rs 6,498.20 crore issued by the Punjab National Bank (PNB) to Modi’s company.
The fraudulent guarantees enabled Nirav Modi to secure loans from overseas banks which he allegedly siphoned off.
The scam pertains to issuance of fraudulent Letters of Undertakings of more than $2 billion to companies of Modi and his uncle Mehul Choksi by the Punjab National Bank’s Brady House branch in Mumbai during 2011-17, officials said.
The agency will file supplementary charge sheets for the remaining amount in which it will detail the role of other accused such as Mehul Choksi, his companies, and Nirav Modi’s wife Ami Modi, they said.
The officials said supplementary charge sheets will have information from foreign governments, shell companies, foreign banks, and detail the role of officials posted in foreign branches of Indian banks which issued credits to Modi’s firms on the basis of PNB LoUs etc.
In its charge sheet filed before a special court in Mumbai, the agency alleged that PNB officials dishonestly and fraudulently issued LoUs to overseas banks for obtaining buyer’s credit in favour of three accused firms – Diamond R US, Solar Exports and Stellar Diamonds – without any sanction limit or cash margin, they said.
An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing international messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB’s internal banking software, thus bypassing scrutiny in the bank, they said.
The agency alleged that the proceeds of buyer’s credit availed from overseas banks on the basis of LoUs of the PNB were dishonestly and fraudulently diverted to pay off the outstanding liabilities of the three accused firms, directly and indirectly controlled by Nirav Modi. Funds were siphoned off to purported overseas supplier firms that were set up and controlled by Nirav Modi through his associates, it alleged.