The fraudulent guarantees enabled Nirav Modi to secure loans from overseas banks which he allegedly siphoned off.
The scam pertains to issuance of fraudulent Letters of Undertakings of more than USD 2 billion to companies of Modi and his uncle Mehul Choksi by the Punjab National Bank’s Brady House branch in Mumbai during 2011-17, officials said.
The agency will file supplementary charge sheets for the remaining amount in which it will detail the role of other accused such as Mehul Choksi, his companies, and Nirav Modi’s wife Ami Modi, they said.
The officials said supplementary charge sheets will have information from foreign governments, shell companies, foreign banks, and detail the role of officials posted in foreign branches of Indian banks which issued credits to Modi’s firms on the basis of PNB LoUs etc.
In its charge sheet filed before a special court in Mumbai, the agency alleged that PNB officials dishonestly and fraudulently issued LoUs to overseas banks for obtaining buyer’s credit in favour of three accused firms — Diamond R US, Solar Exports and Stellar Diamonds — without any sanction limit or cash margin, they said.
An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing international messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB’s internal banking software, thus bypassing scrutiny in the bank, they said.
The agency alleged that the proceeds of buyer’s credit availed from overseas banks on the basis of LoUs of the PNB were dishonestly and fraudulently diverted to pay off the oustanding liabilities of the three accused firms, directly and indirectly controlled by Nirav Modi.
Funds were siphoned off to purported overseas supplier firms that were set up and controlled by Nirav Modi through his associates, it alleged.
It is alleged that senior officials of the PNB, including the then CEO and MD Usha Ananthasubramanian, did not implement the circulars and caution notices issued by the Reserve Bank of India regarding safeguarding swift operation and misrepresented the factual position to the RBI.
Reconciliation of CBS and SWIFT messages was not done despite repeated RBI circulars caution notices and questionnaires, it alleged.
Gokulnath Shetty, the then Deputy Manager at Brady House branch of the PNB, continued in the same seat for seven years and issued fraudulent LoUs with “impunity”, the CBI alleged.
The agency also made it clear that the naming of Ananthasubramanian in the charge sheet does not mean that her predecessors have been given clean chit as the investigation is going on, they said.
The agency has charge-sheeted billionaire Nirav Modi, his brother Nishal, seven employees of his companies including Chief Financial Officer Vipul Ambani and three companies Diamond R US, Solar Exports and Stellar Diamonds.
Chartered Accountant Subhash Kumar Rambia has also been charged with not mentioning loans of Rs 1,700 crore taken by each of the three accused companies in their books, it alleged.
Then MD and CEO Ananthasubramanian, Executive Directors K V Brahmaji Rao and Sanjiv Sharan, and General Manager (international operations) Nehal Ahad are among the 12 officials of the PNB who have been named in the charge sheet.
Gokulnath Shetty, the then Deputy Manager of the PNB, who allegedly issued the LoUs, has also been charge sheeted.
The CBI filed the charge sheet for alleged criminal conspiracy, cheating, forgery and provisions of Prevention of Corruption Act.
The agency has said bank officials have been charged under anti-corruption laws because their acts led to loss to exchequer, corresponding gains to Modi and his companies and “criminal breach of trust” to the public.
The probe into the alleged bribe paid to employees of the PNB to issue such guarantees is underway.