The colour of gold, the sparkle of diamonds, and the mesmerising scent of money played an indispensable role in India's biggest banking scam at Punjab National Bank's Mumbai branch. In 7,000 pages of prosecution complaint filed against 25 accused including Nirav Modi, Usha Ananthsubramanain, Vipul Ambani, Gokulnath Shetty and others, the Central Bureau of Investigation (CBI) has revealed that the bank officials were bribed in every way by Modi & Co to issue fraudulent LoUs (Letters of Undertaking) worth Rs 6,498 crore.
To start with, Yashwant Sinha, the successor of Gokulnath Shetty after latter's retirement from Brady House of PNB received two gold coins and one pair of diamond studded earrings from Nirav Modi for issuing LoUs without any sanctions/cash margin and without entering the transactions in the CBS System, and also for not reporting the matter to higher authorities.
Earlier, it had been reported that prime accused Gokulnath Shetty had compelled Debajyoti Dutta, proprietor of Rashika Financials (on accounts of Gitanjali Exports Corporation Ltd) to part with an aggregate sum of Rs 1.02 crore as illegal gratification for himself by way of cheques favouring himself and his family members by threatening Dutta of stopping his business.
The bank officials colluded with each other like a gang to earn and share the undue favours. The chargesheet said that in July 2017 accused Subhash Parab and Miten Pandya had visited the Brady House branch and they had taken accused Yashwant Joshi and Prafull Sawant for lunch with intent to solicit undue favours.
But these were the small fishes in big muddy water. The biggest crooks in the entire list were the former CEO and MD of PNB Usha Ananthsubramanian, KV Brahmaji Rao (ED, PNB), Sanjiv Saran (ED, PNB) and Nehal Ahad (GM of PNB.
On November 2016, replying to Reserve Bank of India (RBI) questionnaire seeking specific response related to Swift and operational procedures/measures in place for issuing LoUs, etc, the gang led by former CEO prepared misleading answers and misrepresented the facts to the RBI. The answers were:
The CBI has claimed in its chargesheet that all four senior bank officials were "aware of this fraud involving PNB DIFC, Dubai, and Indian Overseas Bank, Chandigarh, and yet they did not take corrective action and remained silent spectator and thereby facilitated continuance of the fraud by other accused public servants resulting in wrongful loss to the PNB".
In case of Usha Ananthsubramanian, she did not take any meaningful corrective measures in her capacity as the executive head of the bank and had without unauthorisation delegated the RBI guidelines work to her subordinates with no follow-up action or action taken report, thereby facilitating the accused in continuance of the fraud.
The CBI went ahead saying Gokulnath Shetty continued to issue fraudulent LoUs with impunity, indicates an environment of protection he enjoyed in the form of the lack of reconciliation and the absence of branch visits by senior functionaries.
"The patronage extended by the senior four bank officials to the accused persons working in PNB resulting in huge wrongful loss to PNB", the chargesheet stated, indicating that the sanction order under section 197 of the Criminal Procedure Code against all four officials (including ex-CEO) will be submitted before the Court after receipt of the same from the competent authority.
Another accused who was almost the backbone of this mega fraud is Vipul Ambani, who bridged the gap between accused Nirav Modi/Mehul Choksi and the bank officials. As per the prosecution complaint, it is also in evidence that Vipul Ambani was meeting former CEO in order to continue with the credit facilities to the group entities.
The investigation has also revealed that Vipul Ambani, president (Investor Relations & Corporate Affairs), Firestar International Ltd, was not only party to the conspiracy wherein Joshi was asked to continue with the issuance of LoUs fraudulently but also was "instrumental in concealing the incriminating documents to the case in the office of a law firm namely Cyril Amarchand Mangaldas". Vipul Ambani was regularly visiting the head office of PNB to meet senior officers to continue with the credit facilities provided to the companies of Nirav Modi Group.