PNB Fraud and modus operandi

PNB Fraud

Firestone Diamond Company is owned by Nirav Mody and this business account is opened in 2011 at PNB BRADY House branch near hutatma chowk Mumbai . This Firestone Diamond Account Has sanctioned credit limit in few hundred crores having letter of undertaking arrangement with Axis Bank And Two other public sector bank This is not a loan account santioned by top authorities but letter of credit or undertaking by overseas banker is misused by the borrower Nirav Mody Hand in glove with lower grade Officers in Brady House Mumbai Branch of PNB
Without the approval money is remitted in overseas accounts through SWIFT on regular basis in hundreds of crores of rupees which is being withdrawn by cronies of Nirav Mody
Such huge remittances exceeds powers of all top authorities including BOD of PNB
How Such Huge foreign remittances through SWIFT transaction could happen and go unnoticed is a million dollar question ?
It is Fraud committed by borrower having nexus with bankers at which level needs to be probed seriously as the money belongs to the people and it is being looted flouting all norms of LOU or Buyers credits
All concerned must be brought to the book and punished after recovery of money
Incidentlally Mr Mehta of Winsome Diamond who is A wilful loan defaulter is in St Kitts Islands and Defrauded many banks with more than 12000 cr but Govt and banks could not touch him like Notorious Vijay Mallya of King Fisher.

The Modus Operandi

According to details included in the initial complaint filed by PNB with the CBI, the issue was detected at the bank’s mid corporate branch at Brady House, Mumbai in mid-January.

Three firms - M/s Diamonds R US, M/s Solar Exports, M/s Stellar Diamonds - approached the bank for ‘buyers credit’ to make payments to overseas suppliers. According to the complaint, Nirav Modi, Nishal Modi, Ami Nirav Modi and Mehul Choksi were partners in these firms. Choksi, in his February 7 statement, said he had no dealing with Solar Exports and Stellar Diamond and had retired from Diamonds R US in 1999.

Buyers credit is short term credit (90-180 days) provided by international banks (or international branches of Indian banks) to an importer. This credit is typically provided based on a ‘letter of comfort’ issued by the importer’s local bank.

When the above three firms approached PNB in January for buyers credit via a ‘letter of comfort’, the concerned official sought a 100 percent cash margin since there was no pre-sanctioned limit for these firms.

At this, the firms contested that they have been availing this facility in the past also. But the branch records did not reveal details of any such facility having been granted to the said firms.

PNB Complaint To CBI

The complaint adds that preliminary investigations have shown that two officials of the bank had in the past fraudulently issued Letters of Undertaking (LoU) to the said firms without following due process.

These fraudulent LoUs were then transmitted across the SWIFT messaging system, based on which credit was offered to the said firms. In its original complaint, PNB specifies that 5 LoUs were issued in favor of Allahabad Bank at Hong Kong and 3 LoUs were issued in favor of Axis Bank at Hong Kong. BloombergQuint could not determine whether subsequent investigations had found LoUs issued in favor of other banks as well.

An email sent to Allahabad Bank and Axis Bank was not immediately answered.

Two officials have been named in PNB’s complaint. BloombergQuint is not naming the officials since it could not contact them directly. According to Rajiv Kumar, secretary in the Department of Financial Services, ten officials from PNB have been suspended