PNB fraud case: CBI arrests 3 more PNB officials in Rs 11,384 cr scam

The CBI on Monday arrested three more Punjab National Bank (PNB) officials after intense grilling during the day in connection with Rs 11,384 crore scam involving billionaire jewellery merchants Nirav Modi and Mehul Choksi, officials said.

The agency also started searches late this evening at group offices of Nirav Modi at Peninsula Business Park in lower Parel, Mumbai.

The total number of arrests by the CBI has risen to five -- four PNB officials and a retired employee of the bank -- after Monday’s development.

Manoj Kharat, a Single Window Operator at PNB, and the retired employee Gokulnath Shetty were arrested earlier.

Bechhu Tiwari, the then chief manager in the Forex department; Yashwant Joshi, Scale II Manager in the Forex department; and Praful Sawant, Scale-I officer handling the exports section were arrested by the agency this evening, officials said.

The agency has started searches at their residences located in Navi Mumbai, Andheri and Dombivilli, they said.

Tiwari was responsible for supervising Shetty, believed to be main accused along with Modi and Choksi.

He had to ensure the entry of authorised SWIFT messages. The agency has alleged that he had "full knowledge" of the activities of Shetty, officials said.

Joshi is also a senior officer in the vertical in which Shetty was working. He had to ensure daily reports of SWIFT and the Core Banking Solution System of the bank, but despite knowing Shetty's activities, he took no action, officials said.

Sawant is a Scale-I officer in the export section and is responsible for checking daily SWIFT messages and report. They were being questioned by the agency since morning, officials said.

Over Rs 11,384 crore worth of Letter of Understanding and Letters of Credit were issued by the bank in favour of billionaire jewellers Nirav Modi and Mehul Choksi through SWIFT messages with only limited number worth smaller sums being entered in the core banking solutions system.

Shetty and Kharat allegedly sent messages of these LoUs and LCs using an international messaging system for banking systems called SWIFT (Society for Worldwide Interbank Financial Telecommunication) which is used to pass instructions among banks globally to transfer funds.

But these messages were not routinely updated in the Core Banking Solutions system of the bank which takes care of daily business.

It is estimated that millions of messages are sent daily using the SWIFT technology globally wherein every member bank can send or receive messages of financial transactions to another bank worldwide.

The CBI is also questioning four senior executives of Nirav Modi's company Fire Star Diamond, including its President (Finance) Vipul Ambani and Chief Financial Officer Ravi Gupta, officials said today.

Ambani had been holding the position for over three years. It is believed he was aware of the financial transactions carried out by the company of the jeweller-businessman, who fled the country before PNB reported the Rs 11,400-crore fraud, the officials said.

He is understood to be a relative of late industrialist Dhirubhai Ambani.

Saurabh Sharma, a senior executive in the finance department of the company, and manager Subhash Parab are also being quizzed.

The CBI confronted them with documents related to Letter of Understandings from the PNB, they said.

The agency had intensified its searches last evening at the branch where the alleged fraudulent transactions took place.

A CBI spokesperson said here today that the branch was briefly sealed early this morning to prevent any "possible tampering".

He said the seal and the notice were removed during the day.

"The PNB Branch was secured with a seal briefly during the wee hours so as to prevent any inadvertent or unauthorised opening by concerned PNB staff. Today the seal and notice at the branch premises were removed," he said.

He said it was a time-bound security measure to prevent possible tampering which did not affect the regular business at the branch since on Monday is a local holiday in Maharashtra for Shivaji Jayanti.

The CBI yesterday started a search operation at the Brady Road branch in Mumbai of PNB, which is at the centre of the colossal banking fraud involving billionaire jewellers Nirav Modi and Mehul Choksi.

Also read: PNB fraud case: ED summons Nirav Modi, Mehul Choksi in connection with money laundering probe

CBI officials said the agency is still questioning arrested bank officials Shetty, who has retired, and Kharat, the Single Window Operator of the bank and Hemant Bhat, the authorised signatory of Nirav Modi's company.

Besides other officials of PNB are also being questioned, to find out more about the money trail and the depth of the alleged scam involving thousands of documents and digital records.