Nirav Modi case: CBI arrests retired PNB deputy manager, two others; ED raids continue

The CBI on Saturday arrested three people in connection with the Punjab National Bank fraud case. The probe agency arrested Gokulnath Shetty, then Deputy Manager (now Retd) Punjab National Bank; Manoj Kharat, SWO (single window operator) PNB and Hemant Bhat, Authorised Signatory of the Nirav Modi Group of Firms. All three will be produced before a CBI Special court in Mumbai later in the day.

The CBI had filed a fresh FIR in the case on Friday, naming 16 people, including Gitanjali Group promoter Mehul Choksi, also the maternal uncle of billionaire diamond jeweller Nirav Modi, and two officials from PNB. The agency alleged in the FIR that Choksi and his three companies — Gitanjali Gems, Gili India and Nakshatra Brand — swindled PNB to the tune of Rs 4,886.72 crore in 2017-18. This was done by getting 143 Letters of Understanding (LoU) issued through the bank.

Meanwhile, the Enforcement Directorate is conducting raids at several branches of Gitanjali Gems across the country.

The CBI is probing the PNB officials’ role in issuing the LoUs to the companies. It reportedly alleges Shetty and Kharat deliberately omitted making entries of LoUsissued on behalf of Choksi’s companies in the Core Banking System (CBS) of the bank to avoid detection.

According to the FIR, “Accused Bank officials Gokulnath Shetty and Manoj Kharat in connivance with accused companies and directors during 2017-18 defrauded PNB to the tune of Rs 4886.72 crore in issuance of fraudulent and unauthorised LoUs in favour of foreign branches of different India-based banks and purported LCs (Letters of Credit) in favour of foreign suppliers of the accused companies.”

“Funds raised were meant to be used for payment of import bills of accused companies whereas it was dishonestly and fraudulently utilised for discharging the earlier liabilities on account of buyer’s credit facility by overseas branches of Indian banks,” the FIR adds.

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