PNB Fraud: Allahabad Bank Divests CEO Usha Ananthasubramanian Of All Powers

Evarado Alatorre
May 17, 2018

Mumbai: The CBI on Wednesday filed a second chargesheet in the Punjab National Bank (PNB) fraud case against diamond merchant Mehul Choksi and his Gitanjali Group's companies.

In a statement, the CBI confirmed it had filed a supplementary charge sheet in the case, but did not name the accused.

On Tuesday, the CBI had named three companies and 22 individuals in its first chargesheet and framed charges under section 120B, read with Sections 409 and 420 of the Indian Penal Code (IPC) and relevant provisions of Prevention of Corruption (PC) Act.

Yesterday, the bank board, following government diktat, had divested two executive directors - K V Brahmaji Rao and Sanjiv Sharan - of all financial and executive powers.

The loss, which contrasted with a profit of Rs 261.90 crore in the year-ago period, came close to the size of Nirav-Choksi scam whose size has been again pushed up to Rs 14,356.84 crore as disclosed by the bank in the notes to the accounts for the March quarter.

PNB, which raised 50 billion rupees from a share sale in December and has received almost 55 billion rupees from the government as part of a $32 billion bank recapitalisation programme, has said it is adequately capitalised for now. Reconciliation of SWIFT system and CBS was not done even after reminders from the RBI, he said.

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The ED had registered the money laundering case against Nirav and others on the basis of a CBI FIR.

On Monday, the CBI had chargesheeted Nirav Modi and 24 others in connection with fraud of Rs 6,498 crore.

The chargesheet points out, "During 2015 to 2018, Mr. Shetty debited an aggregate amount of ₹2.28 crore to the account of Gitanjali Exports Corporation Ltd towards arranger fees which is maintained with PNB, Brady House, in which Mr. Choksi is the managing director and authorised signatory".

The accused have been charged with hatching a criminal conspiracy against the bank and fraudulently issuing letters of undertaking (LoU) to overseas banks to obtain buyer's credit.

An analyst with a private brokerage firm who did not wish to be identified said the loss reported may vary depending on the decision of the bank management on whether to spread the impact of the bond losses and gratuity expenses across quarters or provide for the same in entirety in the March quarter.

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