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Ruling on India’s PNB $2 Billion Fraud

Ruling on India’s PNB $2 Billion Fraud Ruling on India’s PNB $2 Billion Fraud

Cracking the whip, the government of India on Monday asked the Board of Allahabad Bank to take away all the powers of its CEO and MD Usha Ananthasubramanian, the former chief of the troubled Punjab National Bank, in connection with the $2 billion fraud at the Punjab National Bank.

The Board of PNB too has been asked to divest two executive directors of all powers, Financial Services Secretary Rajiv Kumar told reporters in the capital, PTI reported.

After three months of investigation, the CBI filed its first chargesheet in the Rs 13,700-crore ($2 billion) PNB fraud at a special court in Mumbai, naming Usha and 23 others in the chargesheet.  

According to India Today sources, Usha, who worked in PNB from August 2015 to 2017, did not comply with the year 2016 circular of the Reserve Bank of India on the SWIFT system. Along with Usha, three other top officials, PNB Executive Directors K.V. Brahmaji Rao, Sanjiv Sharan and General Manager (International Operations) Nehal Ahad, have also been named for lapses in the handling of the SWIFT system.

The chargesheet names several other bank officials who allegedly colluded with diamond merchants Nirav Modi and his uncle and partner Mehul Choksi to issue fake Letters of Undertaking. It is worth mentioning here that the present chargesheet relates to the first FIR registered for the fraudulent issuance of over Rs 6,000 crore worth of LoUs to Nirav Modi›s three companies, Diamond R US, Solar Exports and Stellar Diamonds. Total three FIRs have been registered in connection with the alleged fraud in PNB.

Apart from Nirav Modi, the chargesheet names his brothers Nishal Modi and Subhash Parab, and an executive in Nirav Modi›s company. The present chargesheet, however, doesn’t mention in detail the role of Mehul Choksi, and it may come up when the CBI files supplementary chargesheets against the Gitanjali Group.

So far, the CBI has arrested 19 people in the PNB scam. Both Modi and Choksi had left the country in January before PNB filed the complaint with the CBI.

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