Security & Fraud

India Brings Charges In Punjab National Bank Fraud Case

The Central Bureau of Investigation (CBI), India’s main investigative agency in the country, has filed charges in the Punjab National Bank fraud case against Nirav Modi, the jewelry retail owner, and his uncle Mehul Choksi, as well as senior executives at the state-run lender.

Quartz, citing the charge sheet, reported the two, who have been on the run since the $2 billion fraud case was revealed, were charged with defrauding the bank via an elaborate scheme in which Modi and Choksi were given loans between 2011 and 2017. The charge sheet accuses 35 people, including Usha Ananthasubramanian, the chief executive officer (CEO) and managing director of PNB when the fraud took place. She is the current head of Allahabad Bank, which is an India-run lender, noted the report. PNB executive directors K V Brahmaiji Rao and Sanjiv Shara were expelled following the charges, which could also happen to Ananthasubramanian. Allahabad Bank told investors it is having a board meeting to discuss the issue, reported Quartz. Ananthasubramanian and the two executive directors were charged with criminal breach of trust, cheating and for enabling wrongful gains to companies and losses to the bank. Twenty other officials were also suspended.

Prime Minister Narendra Modi had ordered the state banks to get rid of the senior executives who were named in the charges, noted the report.  “The government has instructed the government nominees to move board resolutions seeking divestment of their responsibilities … This was the duty of the senior management to minimize the risk in the system,” Rajiv Kumar, secretary in the finance ministry’s department of financial services, said, according to Quartz. Quartz noted that more executives at PNB who served between the years the fraud was conducted could be next to fall under the radar of the Central Bureau of Investigations.  “The moment I have definitive information either from the regulation side, supervision side, or investigation side, the government will not hesitate in taking action to protect people’s trust in the banking system,” Kumar said.

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