PNB set to take legal action against staff who bought assets, opened accounts abroad to help Nirav Modi

Thirty five days after the largest fraud in India’s banking history was revealed, the Punjab National Bank (PNB) has said it was considering tough legal action against a few employees of the Brady House branch in South Mumbai. The fraud was declared in a BSE filing on 14 February this year.

According to this Economic Times report, some employees in what could be termed as an attempt to give a further push to what Nirav Modi and Mehul Choksi were up to, had connived with the main accused and opened bank accounts in foreign destinations. The bank was mulling to start civil case against them.

For the bank it will not be easy to pursue the transaction trail and recover the siphoned-off money as the investigating agencies do not have jurisdiction over foreign soil. To avoid any embarrassment, the bank was seeking legal opinion before taking any final call on the matter, the report added.

Reuters image.

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These staff whose identities have still not be revealed by the PNB had also bought assets in foreign locations, investigation has found. The bank believes these accounts and assets were used as a proxy to siphon off money which also helped the accused to take them outside the country, the probe has found.

It has come to the fore after a thorough investigation that these identified employees were part of the Nirav Modi scam that cost the bank a whopping Rs 13,600 crore, almost $2 billion, loss in fraudulent transactions as well as rocked the entire banking fraternity.

On 28 February, the Bureau of Immigration issued a blue corner notice against Nirav Modi and Mehul Choksi in order to trace the whereabouts of the absconding accused and get them back to the country. The blue corner notice will be valid for a period of one year starting 22 February and will be applicable to all the points of embarkation, the PTI reported.

In the same month, the Central Bureau of Investigation (CBI) had written an email to diamantaire Nirav Modi asking him to be part of the ongoing investigation and to turn up before it.

"In reply to the CBI's mail, the diamond jeweller showing helplessness said that he can't join the probe as he has some pending business abroad," an income tax official was quoted in the PTI report as saying.

It may be noted that Nirav Modi’s maternal uncle Mehul Chokis of Gitanjali Gems is the second prime accused in the case being investigated by the Central Bureau of Investigation and the Enforcement Directorate.

ED, which is an anti-money laundering agency, works under the supervision of revenue department of India’s finance ministry. It implements the Prevention of Money Laundering Act or PMLA. On the other hand, the CBI is country’s prime investigation agency whose key task is to take up anti-corruption probes.