CBI files second chargesheet in PNB-Nirav Modi fraud case

CBI files second chargesheet in PNB-Nirav Modi fraud case

CBI files second chargesheet in PNB-Nirav Modi fraud case

The Punjab National Bank (PNB) has reported a net loss of Rs 13,416.91 crore for the fourth quarter ending March 2018.

The bank's share price on the BSE today settled at Rs 75.55, down Rs 10.45 or 12.15 per cent, from the previous close of Rs 86 per share. Now, the NY court where three of Nirav Modi's companies filed for bankruptcy has reportedly called for an investigation into the role of the bank's employees in the alleged fraud before deciding on proceedings.

Police on Monday charged 22 people, including a former head of PNB and two of its current executive directors.

After Nirav Modi, it has now chargesheeted his uncle Mehul Choksi and 17 others, including Usha Ananthasubramanian, then MD and CEO of Punjab National Bank (PNB).

The investigation has revealed that, during 2015 to 2017, the accused PNB officials fraudulently issued LoUs for obtaining buyer'scredit and FLCs to overseas banks in favour of the said three companies without any sanctioned limit or cash margin and without making entries in the CBS system of the bank.

The Delhi-based lender's earnings will be under pressure as it will have to make provisions for the scam-related payouts to other banks.

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The store estate restructuring is expected to result in a GBP10 million cash inflow and cost savings of GBP5 million. One of the parties concerned, the Pension Protection Fund, has already said it will support the plans.

As a result, provisions for the bad loans jumped four-fold to Rs 16,202.82 crore for the quarter under review compared to Rs 4,910.39 crore parked aside in the same period a year ago.

Incidentally, BDO India LLP, the firm engaged by PNB to conduct a forensic investigation into the fraud committed by Modi and his companies, has also shared its findings with the U.S. bankruptcy court.

PNB said it had allocated 71.78bn rupees to pay around half the amount it owes in the three months to March 31, while setting aside the other 50pc over the next three quarters. Ananthasubramanian was earlier with the PNB.

The filing further said that the bank has made higher than required provisions amounting to Rs 7,178.42 crore. "The total fraud is worth Rs 13,500 crore, out of which Choksi through his companies has cheated the bank of Rs 7080.86 crore". According to the reports, PNB detected the multi-crore scam.

To ensure proper checks and balances, PNB has gone for a four-way split for loan operations and created a focused off-site centre for monitoring all foreign exchange businesses.

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