PNB trashes diamond czar’s claims

The Punjab National Bank (PNB) has asked billionaire diamond jeweller Nirav Modi to come up with a concrete and implementable plan, saying it has followed lawful avenues to recover its dues from him. In a letter to Nirav, the PNB made it clear that it will not give in to his blackmail in the Rs 11,400 crore fraud. The letter was in response to Nirav’s letter to the bank.

The bank said that if Nirav had any concrete and implementable plan, he should revert back to it. Nirav in his letter to the bank had said the over-zealousness on the part of the bank to deal with the issue destroyed his jewellery brand and also jeopardised his ability to clear the dues. Nirav had also claimed that he owed banks less than Rs 5,000 crore and not what was publicised.

In a scathing attack, the bank has alleged that Letters of Understanding (LoUs) issued illegally and in an unauthorised way through a few bank officials. “At no stage such facilities were extended by our bank to the three partner firms. When these illegal activities surfaced, they pointed out towards apparent violation of FEMA and money laundering aspect. As required by law, the bank was compelled to bring their activities to the notice of law and enforcement agencies which the bank did,” the letter said.

The letter was written by Ashwini Vats, General Manager PNB, International Banking Division, Fourth floor, East Wing Corporation Office Dwarka. “Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines. However, should you have any concrete and implementable plan, do revert back,” the letter read.

On the allegations that PNB’s public disclosure of “erroneous liability resulted in a media frenzy” that jeopardised his ability to discharge the dues of the group to the banks, the PNB has said, “We have followed lawful avenues available to us as per law of land to recover our dues.”

Separately, in a clarification to the stock exchanges on not reporting the filing of FIR with the CBI, the bank said, “Since law enforcing agencies were assigned to investigate the matter, any news in public would have alerted the fraudster affecting recovery.” With respect to the CBI arrests of three more PNB men for fraud, the bank said it is “awaiting written reply from Disciplinary Authority”. The bank has also transferred 1,415 employees since February 19.

“The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns,” Nirav had said in his letter.

“In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15, your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts,” Nirav had claimed.