PNB exposure to alleged fraud by Nirav Modi and Mehul Choksi crosses $2 billion

PNB, LLP, Punjab National Bank, Gitanjali Group, SFIO, Nirav Modi, Mehul Choksi, Firestarter Diamond, PNB Fraud, Bank Fraud

Punjab National Bank (PNB) has said to the police that it has discovered additional exposure of about Rs 942 crore ($145.2 million) linking with a huge alleged fraud, according to a court filing seen by Reuters.

However, the bank clarified that the Rs 942 crore is not a new fraud but recall of credit limits. “The amount of Rs 942 crore was the regular limits sanctioned to Geetanjali Group under consortium lending and were standard credit exposure at the time of detection of the fraud. Now, this exposure is being added to the existing fraudulent amount. This amount has nothing to do with any new fraudulent LoUs/LoCs,” PNB said in a statement, a copy of which was seen by Mint.

Nirav Modi’s fraud on PNB is the biggest bank fraud in India’s history. PNB is the country’s second-biggest-state-run lender and last month they said the bank had been defrauded of about $2 billion.

The bank accused two jewellery groups—one controlled by diamond tycoon Nirav Modi and the other by his uncle, Mehul Choksi—of conspiring with crooked bank employees to obtain credit from overseas lenders using fraudulent guarantees.

Both men claim that they have done nothing wrong. However, they left India in January, before the initial complaint was filed, and their whereabouts are unknown, police said.

During a court filing on Tuesday police have said that, including a new complaint filed by the bank, the total amount Choksi’s Gitanjali group of companies allegedly defrauded PNB of has reached Rs7,080 crore.

A lawyer for Gitanjali group’s head, Mehul Choksi, said he doesn’t know about the new allegations and declined to comment on it.

Previously, law enforcement agencies had attributed Rs 6,138 crore of the alleged PNB fraud amount to Gitanjali, and nearly Rs6,500 crore to companies controlled by Modi.

PNB has also alleged Modi’s companies cheated it by a further Rs322 crore, which it said was not used for the purposes for which the loans were given. Tuesday’s disclosure takes PNB’s overall exposure in the still unravelling fraud case to well over the $2 billion mark.


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