Thursday, 24 January, 2019

Mehul Choksi gets non-bailable warrant in PNB fraud case

Mehul Choksi Mehul Choksi uncle of Nirav Modi is one of the key accused in the Rs 13,700 crore PNB scam
Nellie Chapman | 12 April, 2018, 04:30

The ED has conducted searches and seizure of the company and its assets in connection with a money-laundering case related to the over Rs 13,000 crore Punjab National Bank fraud case.

Mumbai: A judicial request meant for United Kingdom was issued by a special CBI court in Mumbai after the agency moved a petition in which it sought to attach a bank account of beleaguered diamond trader Nirav Modi.

It is alleged that Choksi and Modi got LoUs and Foreign Letters of Credit (FLCs) of United States dollars 2 billion issued in favour of foreign branches of Indian banks based on fraudulent claims.

Through a Mumbai special court, the Central Bureau of Investigation on Tuesday got an approval to send a letter rogatory (judicial request) to the United Kingdom.

After the issuance of the request, it needs to be delivered through diplomatic channels to the competent court in that country from where the agency has sought information.

The loan amounts to Rs. 5,280 crores and the consortium was led by the ICICI Bank. Two officials - one from Canara Bank, Bahrain and an official of Bank of India, Antwerp branch - have been called in and are being examined. Fitch is uncertain whether PNB's management will be able to address the fraud quickly, due to the involvement of various investigative agencies. It is alleged that LoUs (letters of undertaking) and LCs (letters of credit) worth close to Dollars 2 billion were issued fraudulently to the companies of the uncle-nephew duo from the PNB's Brady House branch in south Mumbai through SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages. A separate and independent probe is also underway by the Enforcement Directorate.

Banks issue LoU as a guarantee for a short term credit to the applicant when they have their own branches overseas.

Both the uncle Choksi and nephew Modi have been booked in two cases which is related to the bank fraud that came to light in February.

India had earlier asked authorities in Hong Kong to arrest Modi. The government has claimed to have tracked Modi in Hong Kong. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability, and data of the text.