Mumbai: The Enforcement Directorate (ED), investigating the alleged ₹280 crore Letter of Undertaking (LoU) fraud in the Punjab National Bank (PNB), suspects that the two bank employees named as accused are scapegoats, and that the culpability extends to other bank officials.
The ED on Wednesday registered an offence against Nirav, Ami and Nishal Modi, Mehul Choksi, and two PNB officials, identified as Gokulnath Shetty and Manoj Kharat, under the Prevention of Money Laundering Act. Avneesh Nepalia, Deputy General Manager, PNB, had filed an FIR with the Central Bureau of Investigation last month.
On Thursday, the ED searched 17 properties in various places, including Mumbai, Surat and Delhi. Among the properties searched in Mumbai were offices and jewellery showrooms belonging to the Modis and Mr. Choksi, which are located in Kurla, Kala Ghoda and the Bandra Kurla Complex.
“We have seized gold, diamonds, and precious stones worth ₹5,100 crore. We will be examining the financial records of the firms and bills of sale for exported goods to find out if the money was routed through overseas banks using import-export activities as a cover,” an officer said.
Investigating officers said the involvement of several bank officials, some of them at senior posts, is being probed. “The fraud is massive in terms of the money involved and something of this scale could not have been perpetrated by just one branch manager. Multiple LoUs have been issued over a period of time, all of them involving large sums of money, to branches abroad. Ideally, it should have raised alarms earlier,” a senior ED officer said.
The officer said all PNB officials connected to or with access to the LoU process of the bank will be questioned.
“We are also finding out if there was any round-tripping of money involved, and whether there were loopholes in the process exploited by the accused, or some arrangement was put into place to issue LoUs without entering their details in the system,” the officer said.
