The CBI has sought sanction to prosecute then Punjab National Bank (PNB) managing director and chief executive officer Usha Ananth Subramanian and executive directors K. V. Brahmaji Rao and Sanjiv Sharan in connection with the bank fraud case against fugitive Mehul Choksi’s Gitanjali group of companies and others.
The agency registered the case on February 15, 2018, accusing the company and others of causing a loss of ₹4,887 crore to the bank. Mr. Choksi had flown out of the country on January 4, 2018; his nephew, Nirav Modi, and his family members left two days later.
While Mr. Choksi is fighting extradition proceedings in Antigua, of which he had taken citizenship, Mr. Modi is lodged in a London jail and his appeal against the court order allowing his extradition to India is currently pending in the High Court there.
Unauthorised Letters of Undertaking
The total fraud allegedly perpetrated by the uncle-nephew duo and their accomplices involved ₹13,578 crore. In the case against Mr. Choksi and others, the CBI has alleged that his companies got issued unauthorised Letters of Undertaking and Foreign Letters of Credit through then Deputy Manager Gokulnath Shetty and his subordinate at the bank’s Brady House sub-corporate branch in Mumbai.
These guarantee letters were used for getting the funds released from the overseas branches of Indian banks to the suppliers of the accused companies and for paying off their other liabilities.
During the investigation, the CBI also recorded the statement of Ms. Subramanian and other bank officials to determine their role in extending the credit facilities.
Based on the CBI cases, the Enforcement Directorate has been conducting a probe against the accused persons under the Prevention of Money Laundering Act. As a part of the proceedings, it has also attached assets worth thousands of crores in India and abroad.
