PNB scam: CBI Court issues judicial request to allow agency to attach Nirav Modi's Barclays bank account

Mumbai: A special CBI court here on Monday issued a judicial request to be sent to the UK after the central probe agency moved a petition, seeking to attach a bank account of beleaguered diamond trader Nirav Modi, a key accused in the Rs 12,700-crore fraud in the Punjab National Bank (PNB). CBI counsel Om Prakash told the court that Modi’s Barclays bank account in the UK had about 12,79,517 pounds (about Rs 12 crore) and $1,244 (over Rs 80,000).

The Central Bureau of Investigation (CBI) said its probe had revealed that the bank wanted to terminate its relationship with the Nirav Modi Ltd and was set to pay the money back to the billionaire diamantaire. Om Prakash said the agency believed the money in the account was proceeds of crime.

After hearing the agency’s plea to attach the account, special CBI court judge S R Tamboli allowed it and issued a Letter Rogatory (LR) to the UK. A judicial request, also known as a Letter Rogatory, is issued by courts on the request of an investigating agency when it wants information from another country.

Once a court issues such a request, it is delivered, through diplomatic channels, to the competent court in that country, from where the agency seeks information.

Modi and his jeweller uncle, Mehul Choksi, are accused of defrauding the PNB to the tune of around Rs 12,700 crore. The CBI has arrested 19 people so far in connection with the fraud. The Enforcement Directorate (ED) is also conducting an independent probe into the scam.

It is alleged that LoUs (letters of undertaking) and LCs (letters of credit) worth close to $2 billion were issued fraudulently to the companies of the uncle-nephew duo from the PNB’s Brady House branch in south Mumbai through SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages.

Several bank employees have been booked for collusion in the case, CBI and ED officials have said.

An LoU is a guarantee which is given by an issuing bank to the Indian banks that have branches abroad to grant a short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank, along with interest.

Both Choksi and Modi have been booked in two cases each related to the bank fraud, which came to light in February.

The uncle-nephew duo had fled the country in the first week of January, days before the PNB detected the fraud. The government has claimed to have tracked Modi in Hong Kong. It has sent a request to Hong Kong for the diamond trader’s provisional arrest.