PNB fraud case: Vipul Chitalia was stopped at the Mumbai airport and brought to the CBI office
A top official of the Gitanjali group, who the CBI say is a key aide of diamond billionaire Mehul Choksi and had escaped abroad with him before the Punjab National Bank fraud scam was reported, was arrested in dramatic fashion from the Mumbai airport on Tuesday morning as he returned from Bangkok.
Vipul Chitalia, Vice President (Banking Operations) for the Gitanjali group of companies, was taken straight to the CBI office from the airport and questioned.
The CBI alleges that Mr Chitalia was responsible for handling the unauthorized Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) and maintaining contact with the bank officials who were instrumental in the fraud.
While arguing for his custody in a special CBI court, the CBI lawyer described Mr Chitalia as one of the masterminds of the fraud along with Mehul Choksi, who is still evading arrest. The CBI, in its remand application, said "Chitalia was evasive while responding to the questions put to him, regarding the case, modus operandi and other conspirators in the case. There is every reason to believe that he along with Mehul Choksi is the brain behind this conspiracy and that crucial and incriminating documents that are yet to be recovered are within the exclusive knowledge of Vipul Chitalia."
Mr Chitalia was sent to CBI custody till March 17. The CBI believes he will be able to provide crucial missing links in the probe so far.
The Rs 12,636-crore fraud was allegedly committed by billionaire Nirav Modi and his uncle Mehul Choksi. Mr Choksi and Mr Modi allegedly got LoUs and FLCs of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused officials of PNB did not enter the instructions for these LoUs and in their internal software to avoid scrutiny. They were sent through an international messaging system for banking called SWIFT, which is used to pass instructions among banks globally to transfer funds.
A LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest.
With inputs from PTI