Mumbai: In connection with the ₹11,500-crore Punjab National Bank (PNB) fraud, the city civil and sessions court on Saturday remanded a current and a former employee of the bank’s Brady House branch, and a representative of Nirav Modi in CBI custody for 14 days.
The accused are Gokulnath Shetty, deputy manager at the time of the issuing of the letters of understanding (LoUs), Manoj Kharat, PNB’s single window operator, and Hemant Bhatt, authorised signatory for Mr. Modi’s companies.
Special judge Sardar Tamboli said, “The offences in the FIR are very serious. The remand copy show that the fraud is of ₹280.70 crore but could be as much as ₹6000 crore. The investigating agency must be given a chance to investigate as this fraud has consequences on the economy of the nation. Hence they are remanded into custody till March 3.”
The Hindu reviewed the remand copy, which alleges that Mr. Shetty and Mr. Kharat “fraudulently issued eight LoUs on February 9, 10 and 14 of 2017 in favour of Allahabad Bank, Hong Kong, and Axis Bank, Hong Kong.” The remand said they had not followed proper procedure and without making entries in the bank system to prevent detection of the transactions. The accused “transmitted SWIFT instructions to overseas branches of Indian banks for raising buyers credit and funding the NOSTRO accounts of PNB but the funds raised for payment of import bills have not been utilised for such purposes in many cases.”
Individual roles
Mr. Shetty, in connivance with the accused companies had, without authorisation, issued fraudulent SWIFT messages which were not entered in the trade finance module of the Core Banking Solution to avoid detection. PNB’s internal investigation reports revealed that the SWIFT logs were used by many officials, including Mr. Shetty, in various capacities, enabling the fraudulent SWIFT messages.
Mr. Kharat was subordinate to Mr. Shetty and acted upon his directions in verifying SWIFT messages before the latter authorised and transmitted them during 2017. He admitted this was done regularly by many other officers in the past.
Mr Bhatt and a Kavita Mankikar are authorised signatories of the three accused firms. During Mr. Bhatt’s interrogation, it was found that he is also a director in around 16 of Mr. Modi’s firms, was aware of the modus operandi and the roles played by officials of PNB and Mr. Modi’s companies.
Investigators said that the involvement and connivance of more staff members and outsiders cannot be ruled out.
