Subhash Shankar Parab (photo credit: cbi.gov.in) and Nirav Modi (File) The Central Bureau of Investigation (CBI) arrested Subhash Parab, a former employee and a close confidante of fugitive diamond trader Nirav Modi, in connection with the Rs 13,500 crore fraud at Punjab National Bank (PNB). Parab, who had left India after the scam broke in early 2018, was brought back by the CBI from Cairo. He was produced before a special CBI court on Monday afternoon which sent him to the agency’s custody till April 26.
Parab, 50, was the deputy general manager (finance) in Modi’s firm, Firestar International Pvt Ltd (FIPL) from April 2015. The CBI told the special court that Parab left the country just before the scam broke out in public on January 1, 2018 – the same day when Modi fled India. Seeking his 14-day custody, CBI special public prosecutor A Limosin told the court that Parab was a close confidante of Modi and directly reported to him. The CBI, in its remand plea, also said that Parab was looking after banking-related activities of three firms named in the case – Diamonds R US, Stellar Diamond and Solar Exports. He was also heading the banking operations department of the company, preparing applications for issuance of fraudulent Letters of Undertaking (LoU) and its supporting documents. It was claimed that applications for LoUs and other related correspondences were prepared on Parab’s instructions. The CBI also claimed that he was instrumental in handling finances of six Hong Kong-based and 13 Dubai-based dummy companies floated by Modi.
The CBI also claimed that he actively participated in the conspiracy, including in conniving with bank officials. A non-bailable warrant was issued against Parab in May 2018 and Interpol issued a Red Corner Notice against him in June 2018. The CBI said that he had first fled to Dubai and then to Cairo, from where he was brought to India.
Defence lawyer Reshma Mutha submitted to the court that Parab was merely an employee and not an authorised signatory of the LoUs. She also submitted that Parab was not involved in any conspiracy. In addition, she told the court that he is ready to cooperate with the probe but there is fear among his family members with investigating officials visiting their home at “odd hours”.
Fraudulent LoUs worth $3,741.93 million (approximately Rs 24,000 crore) were issued to firms allegedly controlled by Modi between 2011 and 2018. Of this, the total current outstanding fraudulent LoUs is to the tune of $1,015.34 million.
Modi and his uncle Mehul Choksi have been declared fugitive economic offenders. Modi is currently in jail in the UK while Choksi is in Antigua and Barbuda.
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