The CBI has arrested Gokulnath Shetty, a former deputy general manager at PNB, and Manoj Kharat, a so-called "single window operator" at the lender, CBI spokesman R.K. Gaur said on Saturday. The PNB fraud pertains to issuance of fake Letters of Understanding (LoUs) to companies associated with billionaire jeweler Nirav Modi by errant PNB employees which enabled these companies to raise buyers credit from global branches of other Indian lenders.
India's federal police arrested two employees at Punjab National Bank (PNB) believed to be at the centre of a staggering US$1.77 billion (S$2.3 billion) fraud, a police source said yesterday, in the first arrests so far in the country's biggest-ever bank scam.
The CBI is also looking into the matter.
Nirav Modi, 46, a regular feature on the lists of rich and famous Indians since 2013, was booked by the CBI, along with wife, brother and Gitanjali Group promoter Mehul Choksi on January 31, for allegedly cheating the state-run PNB to the tune of Rs 280 crore.
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Kushner's lawyer seems pretty sure of that too, telling the Post that Kelly's new policy "will not affect Mr. Kushner's ability to continue to do the very important work he has been assigned by the president".
The Enforcement Directorate (ED), on its part, continued its searches in 21 locations across India in the Rs 11,344.40 crore scam, seizing diamonds, jewellery and precious stones worth Rs 25 crore at book value. Commission in exchange of issuing the aforementioned document was distributed between all employees of PNB involved in it, the CBI said. "Original sin in this episode of Nirav Modi was committed in 2011", senior BJP leader and defence minister Nirmala Sitharaman said at a press briefing.
Shetty and Kharat allegedly sent messages of these LoUs using an global messaging system for banking systems called SWIFT (Society for Worldwide Interbank Financial Telecommunication) which is used to pass instructions among banks globally to transfer funds. Vikram Kothari, the owner of Rotomac pens, owes Rs 800 crore to a consortium of Indian banks and is now untraceable, he said.
The PNB sought to shift the blame on overseas branches of Indian banks: State Bank of India's Mauritius and Frankfurt branches, Bank of India's Antwerp branch, Canara Bank's Bahrain branch, UCO Bank's Hong Kong branch and the to foreign branches of Union Bank of India, Axis Bank and Allahabad Bank for not raising alarm over fake LoUs.
The Uddhav Thackeray-led party, a BJP ally, said Mr Modi's promise of putting an end to corruption in the country, highlighted through his slogan "na khaunga, na khane dunga", was in tatters after the alleged fraudulent transactions of Rs 11,400 crore came to light. An alarmed bank dug out all such LoUs and FLCs showing a mammoth liability towards other banks.
Similarly, for FLCs, the two officers entered a smaller amount in the CBS to generate a reference number.