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PNB extends fall post Rs 114-bn fraud detection; Gitanjali hits 52-week low

SI Reporter/Mumbai 15 Feb 18 | 03:50 PM

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai (Photo: Kamlesh Pednekar)

Punjab National Bank (PNB) ended nearly 13% lower at Rs 127 levels on Thursday, extending its previous day’s 10% decline on BSE, after the state-owned bank said on Wednesday it had been defrauded of about Rs 114 billion by jeweller Nirav Modi, his maternal uncle Mehul Chinubhai Choksi, and other relatives through a clutch of companies their own.

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The stock of state-owned lender had slipped 9% to Rs 133 in early morning trade today. In a letter to the chiefs of several banks, a general manager of PNB said the letters of undertakings (LoUs) were opened in favour of branches of Indian banks for import of pearls for a period of one year, for which the Reserve Bank of India (RBI) guidelines stipulate a total time period of 90 days from the date of shipment, the Business Standard reported.

Three jewellers Gitanjali Gems and its subsidiaries Gili and Nakshatra are also under the scanner of investigation agencies, added report. CLICK HERE TO READ FULL REPORT.

On Thursday, The PNB chief said the fraud was detected on January 25 and was reported to the investigative agencies, including the Central Bureau of Investigation (CBI) on January 29. He said he had received a "vague email" from the customers involved in the fraudulent transaction about settling the dues and the bank had asked them to send their detailed response. He said the transactions were detected in only one branch and no other branches were involved. READ THE FULL STORY HERE

The stock of Gitanjali Gems plunged 19% to Rs 47.50, also its 52-week low on BSE in intra-day trade today, after falling 7% on Wednesday. Currently, the stock was quoting 17% lower at Rs 48.75 on back of an over six-fold surge in trading volumes. A combined 24.58 million shares changed hands on both the exchanges.

“The Bank has detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions other banks appear to have advanced money to these customers abroad," PNB said on Wednesday in a regulatory filing.

In the Bank these transactions are contingent in nature and liability arising out of these on the Bank shall be decided based on the law and genuineness of underlying transactions. The quantum of such transactions is $1,771.69 Million (approx), it added.

The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land. The Bank is committed to clean and transparent banking, PNB said.

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