One of the biggest scams in the country’s corporate history was brought to light when Delhi-based Punjab National Bank (PNB) revealed on Wednesday it had been defrauded of about ₹114 billion by jeweller Nirav Modi, his maternal uncle Mehul Chinubhai Choksi, and other relatives through a clutch of companies they own.
The revelation was stunning as to how the culprits managed a fraud of this magnitude.
In raising funds and moving money out of Punjab National Bank (PNB), the two employees of the state-owned lender directly used SWIFTBSE — the global financial messaging service used to move millions of dollars across borders every hour — and bypassed the core banking system (CBS) which processes daily banking transactions and posts updates.
Prime accused Nirav Modi, 48, is being investigated by the CBI, which reportedly put out a lookout notice for him after filing an FIR on January 31. According to the officials, the jeweller, had left the country before the FIR was filed based on complaints from PNB on January 29.
Nirav Modi was raided over charges that he and his associates swindled Rs.280 crore from the bank.
India's second largest government bank said today that it had discovered in January that $1.8 billion or over ₹11,000 crore of taxpayers' money had been illegally transferred abroad to select customers from a single branch in Mumbai.
Nirav Modi's home, showrooms and offices in Mumbai, Delhi and Surat were searched by the Enforcement Directorate (ED) today after PNB complained of staggering fraud at the cost of the taxpayer to benefit the celebrity jeweller and others.
Nirav Modi, recently seen in a group photo in Davos with Prime Minister Narendra Modi, flew out of India on January 1. State-run PNB on Wednesday reported ₹11,000 crore fraud by its own officials to help Nirav Modi and others get credit without guarantees and in violation of rules.
Further revelations are expected in this case and it remains to be seen how PNB attempts to recover the hefty sum.
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