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PNB scam: CBI seeks Red Corner Notices against Nirav Modi & Choksi

Press Trust of India/New Delhi 11 Jun 18 | 11:18 PM

The CBI has sought Interpol Red Corner Notices against billionaire jeweller Nirav Modi and his uncle Mehul Choksi, who had absconded days before over the USD 2 billion banking fraud allegedly perpetrated by them on state-run Punjab National Bank came to light, officials said.

Modi, who is in the UK attempting a political asylum, and Choksi, promoter of Gitanjali group whose whereabouts are unknown as yet, are on the run since the CBI registered an FIR against them on January 31. 

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The duo had fled the country in the first week of January along with some family members, nearly a fortnight before PNB detected the fraud -- which is said to be biggest in the country's banking history, officials said.

Modi and Choksi have refused to join the probe citing business engagements and health issues, the officials added.

Choksi was reported to be in New York where he was allegedly seen enjoying a meal in a lavish upmarket restaurant but his exact location remains unknown, they said.

Left with no choice, the CBI has asked the Interpol to issue a Red Corner Notice against Modi and Choksi, which would mean that the member countries of the Lyon-based international police cooperation agency can arrest and later deport or extradite them, they said.

Nirav Modi was last publicly seen in a Press Information Bureau group photograph of CEOs and top brass of Indian corporate sector with Prime Minister Narendra Modi at Davos, Switzerland in late January. 

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A week later, the CBI registered an FIR against the two, among others, on the basis of a complaint from the PNB, they said.

Nirav Modi's brother and wife were also named as accused in the FIR.

His wife Ami, a US citizen, brother Nishal a Belgian, and uncle Choksi, Gitanjali group's promoter, are also said to have fled the country in the first week of January.

The case pertains to allegedly cheating the state-run bank through fraudulent issuance of Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs). 

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The agency recently charge-sheeted both Nirav Modi and Choksi separately in the scam. It has now approached the Interpol for a Red Corner Notice to bring them back for facing trial in the cases against them, sources said.

The CBI, in its charge sheets filed on May 14, had alleged that Nirav Modi, through his companies, syphoned off funds to the tune of Rs 69.482 billion using fraudulent LoUs issued from PNB's Brady House branch in Mumbai. Choksi allegedly swindled Rs 70.80 billion.

An additional loan default of over Rs 50 billion to Choksi's companies is also a matter of probe by the CBI.

It has been alleged that Nirav Modi and Choksi through their companies availed credit from overseas branches of Indian banks using fraudulent guarantees of the PNB given through LoUs and letters of credit which were not repaid bringing the liability on the state-run bank, officials said.

An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.

The instructions for transferring the funds were allegedly issued by a bank employee, Gokulnath Shetty, using an international messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB's internal banking software, thus bypassing any scrutiny in the bank, they said.

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