Published: Mon, April 09, 2018
Economy | By

PNB scam: ED unearths Rs5,000 crore money trail

PNB scam: ED unearths Rs5,000 crore money trail

Mr Khan is the senior-most former official of the RBI to be questioned by the CBI in connection with bank scams involving jewellers Nirav Modi and Mehul Choksi and relaxation of gold import rules in 2014 by the erstwhile UPA government allegedly to the benefit of private traders.

This fraud on PNB was allegedly perpetrated by two jeweller groups that raised loans from overseas branches of Indian banks using almost $2 billion of fraudulent guarantees issued by some rogue PNB staffers over a period of years.

A special court in Mumbai had issued non-bailable warrants last month on the request of the ED.

The scam, initially estimated at Rs. 280cr, has grown significantly in valuation, and probe is still underway.

Mehul Choksi is the uncle of billionaire diamond merchant Nirav Modi and promoter of Gitanjali Gems.

The agency had also told them to contact the nearest Indian embassy to get temporary travel documents, but they refused to do so.

The agency has also summoned an official who handled foreign exchange transactions.

The Ministry of External Affairs, in its written response to a specific query in Lok Sabha, said Nirav Modi is in Hong Kong.

Without disclosing the name of the lawyers, he said the bank is legally engaged in the matter of insolvency proceedings of Firestar Diamond and the concerned authorities have been requested to make the bank a party in the case.

According to sources, H R Khan, RBI's former deputy governor is being questioned about the fraudulent Letters of Undertaking (LoU) issued by banks to Nirav Modi and Mehul Choksi.

"The agency has observed the involvement of shell companies; that is why the examination of other banks has become necessary", said a CBI official.

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