PNB fraud: CBI likely to file chargesheet in May; agency finds major lapses by bank officials in issuing LoUs to Nirav Modi’s firms

The Central Bureau of Investigation (CBI) is close to filing its first chargesheet in the over Rs 13,000 crore Punjab National Bank (PNB) scam, involving billionaire jeweller Nirav Modi, his uncle Mehul Choksi and their companies. According to the Business Standard, the central agency will file the chargesheet in the second week of May. The agency has reportedly found major lapses by bank officials while issuing letters of undertaking (LoUs) to Modi’s entities via foreign branches of other Indian banks. [caption id=“attachment_4377953” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The CBI chargesheet is likely to name Modi, Choksi, Firestar Diamond’s CFO Vipul Ambani, and PNB officials Gokulnath Shetty (retired), Manoj Kharat and a few others, the newspaper said. The agency will also mention irregularities by the PNB in the verification of documents while sanctioning large amounts to Modi’s firms. The Times of India on Thursday said the CBI will soon send a detailed assessment report to the government and the Reserve Bank of India (RBI), listing flaws in the banking industry. The newspaper said the assessment report will include details on how bank officials, particularly of public sector banks, ignore RBI guidelines while sanctioning credit facilities and deliberately favour certain individuals or companies. The government on 18 April had approached the National Company Law Appellate Tribunal (NCLAT) seeking modification of the National Company Law Tribunal (NCLT) order so that it can attach the properties of those involved in the PNB fraud. In a petition, the corporate affairs ministry had also sought to invoke powers including the removal of the management and recovery of undue gains. The NCLT had restrained more than 60 entities, including Nirav Modi, Mehul Choksi, various individuals, companies and limited liability partnership firms, from selling their assets under section 221 of the Companies Act. Gitanjali Gems, Gilli India, Nakshatra Brands and Firestar Diamond are among the barred companies, while partnership firms include Solar Exports and Stellar Diamond. Earlier this month, news reports said the Enforcement Directorate (ED) could file its first chargesheet, against Modi, Choksi and others, by the second week of May. With inputs from PTI