Indian investigators grill bank boss in fraud probe

A showroom of Geetanjali jewels. Credit Facebook

A showroom of Geetanjali jewels. Credit Facebook

The Delhi High Court on Wednesday issued a notice to the Enforcement Directorate after Nirav Modi's firm Firestar Diamond International filed a petition challenging the agency's authority to search its properties.

He is the third high-ranking banker to have been called by the SFIO for the probe into the Rs 12,600-crore PNB fraud involving absconding diamantaires Nirav Mehta and his uncle-cum-business associate Mehul Choksi.

These position PNB for sustained good performance and, going forward, generating positive market sentiment and market capitalisation gains, Jaitley said in a written reply to a Rajya Sabha question on the recent fraud at PNB.

Bangalore-based Hari Prasad S.V., a disgruntled former franchisee of Gitanjali Gems, became a whistleblower after he failed to recover Rs 13 crore from Choksi's jewellery firm.

Choksi and Modi are accused of defrauding the PNB of Rs. 12,600 crore, with Rs. 1,300 crore being added to the fraud total February 26.

Presently, the investigation details revealed by the agency hint that uncle Mehul Choksi is the bigger crook than Nirav Modi.

In a statement to the stock exchange late on Tuesday, Axis said the SFIO had sought information from it on the accounts of Nirav Modi and Choksi's Gitanjali group of companies. The bank sent a team led by deputy MD V Srinivasan and executives from the trade and transactions department to SFIO's Mumbai office. Axis Bank said its exposure to these entities is just Rs 200 crore and that the bank is not a leader in the consortium.

The consortium comprises 30 public sector banks and nine private and multi-national banks. ICICI Bank confirmed that it is a working capital lender to Mehul Choksi.

As has been widely reported, officials at the Brady House branch of PNB in Mumbai allegedly issued Rs. 12,600 crore worth of Letters of Undertaking (LoUs) and foreign letters of credit in favour of the companies of Modi and Choksi, to the Hong Kong branches of Allahabad Bank and Axis Bank in an irregular manner.

The PNB said that cases of circular transactions between Nirav Modi-promoted partnership firms Solar Exports, Stellar diamonds and Diamond R United States and Nirav Modi-promoted Firestar Group of companies - Firestar International Ltd (FIL) and Firestar Diamonds International Pvt Ltd (FDIPL) - came to its notice.

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