Published: Sun, February 18, 2018
Business | By Max Garcia

PNB fraud: UCO Bank says has $411.82 mn outstanding exposure

PNB fraud: UCO Bank says has $411.82 mn outstanding exposure

"The ED conducted further searches at 21 locations across India in Nirav Modi case and seized diamonds, gold, precious stones/metals and jewellery worth Rs 25 crore (book value)".

On February 14, PNB informed the stock exchanges that a $1.8 billion fraud had happened in one of its Mumbai branches.

Modi managed to do this by procuring Letters of Undertakings from Punjab National Bank's Brady House branch in Mumbai.

"We have approached the Interpol with a request for issuing diffusion notice which is used to request the arrest or for locating the culprits", a Central Bureau of Investigation official said.

While Modi runs a jewellery brand chain under his name, his uncle Choksi is the promoter of Gitanjali Gems. The applicants for these Letters of Credit includes few of the corporate clients associated with the incident of recent fraud at PNB, it said. The total seizures by the ED has now risen to Rs 5,674 crore.

The government on Friday announced that the passport of the fugitive billionaire Modi and Choksi have been cancelled for four weeks.

TV Station NDTV on Friday reported he was at a suite in a hotel in NY, citing household staff who answered the door.

Defence Minister Nirmala Sitharaman had alleged that there was a clear "link" between the family of Abhishek Manu Singhvi and a firm run by Nirav Modi, the man at the centre of the multi-crore Punjab National Bank (PNB) Scam.

Under the new anti-black money law cases of overseas illegal assets, which till recently were probed under the regular and civil Income Tax Act of 1961, attract a steep 120 per cent tax and penalty on undisclosed foreign assets and income besides carrying a jail term of up to 10 years.

Xinhua news agency said Mr Modi's wife Ami Modi and brother Nishal Modi have also fled India.

Meanwhile, the central bank also said that the fraud in PNB is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal controls.

Rahul Gandhi while speaking to media also asked PM Modi to issue a clarification in the PNB scam which Congress alleged was Rs 22,000 crore scam instead of Rs 11,300 crore.

Jewellery traders fear that after this fraud, banks would be more cautious about lending to them, which would hurt their credit flow.

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