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PNB fraud: Sebi likely to probe disclosure lapses by banks, jewellery firms

Press Trust of India/New Delhi 15 Feb 18 | 03:06 AM

Photo: Reuters

Sebi is likely to probe possible disclosure lapses by banks and other listed companies, including several jewellery firms, that have come under the scanner in connection with the whopping Rs 110 billion fraud detected at state-owned PNB.

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Besides, the watchdog and the stock exchanges would analyse trading data of these companies and their top officials, some of whom are already under the scanner for insider trade and other violations, officials said.

The latest development, experts believe, is expected to give a further push for the regulator's proposal to mandate listed companies to disclose loan defaults within a day of happening. The proposal has been put off apparently due to reservations expressed by the banking industry.

Punjab National Bank (PNB) today disclosed that it has detected some fraudulent transactions with a financial implication of $1.77 billion (about Rs 113.46 billion) and the matter has been referred to law enforcement agencies for the recovery.

Officials said that Sebi would be looking at possible lapses by banks and various listed companies, including many jewellery firms, in making the relevant disclosures.

The trading patterns of the companies as well as their senior officials who have come under the lens would also be looked into by the regulator, they added.

In a statement, PNB said that fraudulent transactions took place in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance.

"Four big jewellers -- Gitanjali, Ginni, Nakshatra and Nirav Modi -- are under scanner. The CBI and Enforcement Directorate is looking at their arrangements with various banks and end use of money," a senior official of a public sector bank said.

No immediate comments were available from these companies.

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