Who are the PNB officials who colluded with Nirav Modi in the Rs 11,000 crore fraud?
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The CBI FIR names two junior bank officials who fraudulently issued Letters of Undertaking.
Mumbai-based diamond merchant and jewellery designer Nirav Modi, the prime accused in the Rs 11,360-crore banking fraud reported by the Punjab National Bank (PNB), has fled the country. According to reports, he has flown to Switzerland to evade arrest. Incidentally, Nirav's last major public appearance was at the World Economic Forum in Davos, Switzerland, where he was part of a delegation of Indian businessmen and corporate leaders that accompanied Prime Minister Narendra Modi.
Nirav’s fraud was revealed in the third week of January, when his companies sought a fresh loan from PNB, which is India’s second-largest state-run bank. When the bank insisted on guarantees to issue Letters of Understanding (LoU) — an assurance given by one bank to another as security to meet liabilities on behalf of a customer — the companies allegedly said they had used the facility before.
That's when the bank started its investigation. PNB claims it was soon discovered that an unauthorised junior-level official fraudulently issued LoUs on behalf of some companies belonging to the Nirav Modi Group. According to PNB’s complaint to CBI, five LoUs were issued in favour of Allahabad Bank at Hong Kong and three in favour of Axis Bank at Hong Kong.
Based on a complaint from PNB, the Enforcement Directorate (ED) raided Nirav Modi's home, showrooms and offices in Mumbai, Delhi and Surat. According to reports, on February 15, 10 of Modi’s properties (at least) were raided, including his home in Mumbai's Worli, his jewellery boutique in the city's Kala Ghoda area, and showrooms in Delhi's Chanakyapuri and Defence Colony.
The CBI alleged that the agency had received two complaints against Nirav being involved in a fraud worth Rs 10,000 crore.
He was already under the CBI's scanner, having being previously named in a FIR lodged over an alleged Rs 280-crore fraud, again at PNB, although it isn't clear whether it is directly linked to the reports about the Rs 11,000-crore fraud.