PNB fraud: PIL in Supreme Court seeks SIT probe

The PNB fraud involves foreign branches of Indian banks lending to companies of jewellery designer Nirav Modi and his uncle, Mehul Choksi, based on LoUs fraudulently issued by officials of Punjab National Bank. Photo: AFP

New Delhi: A petition seeking the creation of a special investigation team (SIT) to probe the Rs11,400-crore Punjab National Bank (PNB) fraud was filed in the Supreme Court on Monday.

The case is currently being investigated by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

The public interest litigation (PIL), filed by advocate M.L. Sharma, is yet to be listed before the court.

The fraud involves foreign branches of Indian banks lending to companies of jewellery designer Nirav Modi and his uncle, Mehul Choksi, based on guarantees fraudulently issued by PNB officials.

The whereabouts of Modi, who was already under investigation by CBI in connection with an earlier complaint by PNB, are not known.

The employees allegedly issued authorized so-called letters of undertaking that helped Modi’s companies raise credit abroad.

It is believed that they did so without making any entries in the bank’s books or recording them in the core banking system.

The international branches of many Indian banks, including Allahabad Bank, Axis Bank, State Bank of India (SBI), Union Bank of India and some foreign banks, lent to Modi’s companies based on these guarantees.

The ministry of external affairs has suspended the passports of Modi and Choksi for four weeks, and the income tax department has attached 29 properties and 105 accounts of Modi, his wife and their firms.

ED on 17 February conducted searches across 21 locations at premises belonging to Modi and Gitanjali Gems managing director Choksi, bringing the total value of the seizures to Rs5,674 crore.