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Crime, Police And Law

Nirav Modi case: Fresh CBI charge sheet against retired PNB official for disproportionate assets

By Richa Shah      05 October, 2020 03:07 PM      0 Comments
Punjab National Bank Nirav Modi case

On Friday (2nd October 2020), a fresh charge sheet was filed by the Central Bureau of Investigation (CBI) against Gokulnath Shetty who is the Punjab National Bank Deputy Manager and also the person accused of helping Nirav Modi and Mehul Choksi perpetrate Rs 13000-crore fraud and his wife for amassing disproportionate assets worth Rs 2.63 crores. The CBI has charged Gokulnath Shetty and his wife Asha Latha Shetty who is a clerk in Indian Bank under corruption charges for amassing assets worth over Rs 4.28 crore during the period 2011-17. It is the same time when the scam was being perpetrated at the Brady House branch of PNB in Mumbai where he was posted.

Of the total assets, the CBI said that they could not provide a satisfactory explanation for assets worth Rs 2.63 crore, which was 2.38 times disproportionate to their known sources of income. The CBI after having a look into the relationship between Shetty and Modi-Choksi, and during this procedure, they dug into the assets amassed by the retired deputy manager.

In November 2018, the CBI had registered a separate FIR against Shetty and his wife in order to have a look at their assets. It was found out during that investigation that against a genuine income of Rs 72.52 lakh during a six-year period, the Shetty couple had assets in their as well as family members’ names primarily in the form of flats in Mumbai. In Mumbai special court, where a charge sheet was filed recently, the agency has said that a flat worth Rs 46.62 lakh was purchased in Goregaon while the advance amount for three more flats in various localities of Mumbai and neighboring areas was paid. Also, the agency detected fixed deposits, bank balance, and recurring accounts amounting over Rs 75 lakh.

After computing all investments, income, and expenditure, the CBI concluded that Shetty and his wife have combined disproportionate assets of Rs 2.63 crore during 2011-17. The CBI has already filed charge sheets against Modi and Choksi in which role of Shetty who is presently in judicial custody, is given.

Shetty was arrested in March 2018 as he played a key role in the scam.

In January 2018, The scam surfaced when the companies owned by Modi and Choksi approached the Brady Road branch in seeking renewal of the Letter of Undertaking (LoU) for payments to suppliers.

Shetty, the then Deputy Manager at Brady House branch of the PNB, had retired in 2017, had continued in the same seat for seven years, and issued fraudulent LoUs with "impunity”, the CBI has alleged and also said that Shetty though was a junior officer enjoyed clearance level much higher than his post due to which he had full powers in Finacle, internal software used by PNB for verifying large transactions. Also, Shetty bypassed PNB’s core banking system Finacle, and issued LoUs fraudulently. The investigations also reveal that messages for fraudulent LoUs were sent to overseas banks by misusing the international messaging system for banking called the SWIFT platform and without making their subsequent entries in Finacle thus bypassing any scrutiny of such funds in the bank, they said.

The companies of Modi and Choksi took loans from banks abroad on the basis of these LoUs but did not repay them transferring the liability on PNB. The then CEO and MD 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, the CBI has alleged.

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