CBI Files Suplementary Chargesheet In 7,080-Crore Bank Fraud Case

The CBI has filed a chargesheet against the former international head of the Gitanjali Group of Companies, Sunil Verma, and others in connection with an alleged fraud with the Punjab National Bank, involving an amount of over Rs 7,080 crore, in which the promoter of the group, Mehul Choksi, is wanted by the agency, officials said on Wednesday.

Two officials of the Punjab National Bank (PNB) -- Sagar Sawant and Sanjay Prasad -- and a director of the Gili and the Nakshtra brands under the group, Dhanesh Seth, have also been named as accused in the supplementary chargesheet filed by the Central Bureau of Investigation (CBI), they said.

The supplementary chargesheet, filed more than three years after the first chargesheet in the case against Choksi and his companies, coincides with the legal proceedings against the fugitive diamantaire in a court of Dominica, where he was arrested for "illegal entry" on May 24 after his mysterious disappearance from neighbouring Antigua and Barbuda.

"This supplementary chargesheet after three years shows that it is only an attempt to cover up anomalies that the defence had pointed out in the first chargesheet. Moreover, the addition of section 201 of the IPC for destruction of evidence is not legally tenable as a document becomes evidence only after its filing in the court and the allegations are of a period much prior to the FIR," Choksi's lawyer Vijay Aggarwal said.

Choksi was living in Antigua and Barbuda since 2018, after he escaped from India in the first week of January that year, weeks before the scam was reported.

The diamantaire and his nephew, Nirav Modi, allegedly siphoned off over Rs 13,000 crore of public money from the PNB, using letters of undertaking (LoUs) and foreign letters of credit (FLCs) by bribing officials of the bank's Brady House branch in Mumbai.

From the total scam amount, Choksi's companies are accused of siphoning off Rs 7,080 crore through LoUs and FLCs, while Modi and his companies have allegedly cheated to the tune of over Rs 6,498 crore, according to the CBI.

The agency's probe has so far found that 165 LoUs and 58 FLCs were issued to Choksi's companies.

The CBI has claimed that its probe is continuing in the matter and the final amount siphoned off by the accused is still under investigation.

The agency has slapped charges of criminal conspiracy, cheating, breach of trust, disappearance of evidence, falsification of accounts, bribery and criminal misconduct by public servant in its supplementary chargesheet filed before a special court in Mumbai.

The CBI probe has revealed that from 2011 to 2017, the accused officials of the PNB, in a conspiracy with Choksi and his company executives, fraudulently issued a large number of LoUs to overseas banks for obtaining buyer's credit in favour of his firms.

These LoUs and FLCs were allegedly issued to Choksi's firms without any sanctioned limit or cash margin and without making entries in the bank's central banking system to evade any scrutiny in case of a default.

The LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. In case the client does not repay to the foreign bank, the liability falls on the guarantor bank.

It is alleged that Choksi and Modi used the mechanism to get credit from foreign banks, which was not repaid, bringing the liability of over Rs 13,000 crore on the PNB.

The investigation has further revealed that the fraud was allegedly perpetrated despite circulars issued by the Reserve Bank of India (RBI), which was in the knowledge of senior PNB officials, the CBI has alleged.

Further, the PNB officials did not implement the circulars and caution notices issued by the RBI regarding safeguarding the SWIFT (international banking messaging system) operations and instead, misrepresented the factual situation to the RBI, the agency has alleged.