The Rs 11,400 crore swindle involving the Punjab tiol Bank and one Nirav Modi is probably the largest ever scam that the country has ever recorded. The modus operandi of the scam seems to be rather complicated involving 150 letters of understanding issued by the Punjab tiol Bank. A company by the me of Gitanjali Gems, with Mehul Choksi as its maging director, succeeded in siphoning out thousands of crores of rupees from the Punjab tiol Bank through its various subsidiary/sister companies. On January 29, 2018, the Punjab tiol Bank (PNB) approached the CBI with a complaint that Nirav Modi and his associates had defrauded the bank of Rs 280.70 crore. Since then, in a matter of days, the figure has zoomed past Rs 11,000 crore, making this one of the largest scams in the country. What is indeed significant is that on July 26, 2016, S.V. Hari Prasad a purported franchisee of Gitanjali Gems based in Bangalore had sent a letter to the Prime Minister’s Office alleging fraudulent activities involving thousands of crores of rupees by Mehul Choksi, the maging director of Gitanjali Gems and its various subsidiary/sister companies. In the documents attributed to Prasad and made public by the Congress recently, 42 purported cases filed against Choksi have been listed. One of them relates to a rent dispute between Prasad and Choksi. Prasad, who got an acknowledgement of his letter from the PMO apparently approached the Prime Minister’s office only after he failed to get a positive response from the CBI and the Enforcement Directorate. What is indeed most intriguing is that Nirav Modi maged to leave India when the government and the PMO had been alerted to the fraud much in advance. And it is not the first time that someone who has defrauded banks of huge amounts of money or committed similar unlawful activities of a serious ture has maged to leave the country without the government taking any steps to prevent their escape. People like Lalit Modi and Vijay Mallya too had maged to leave the country without any difficulty despite the serious charges against them. People cannot help wondering why the Prime Minister did not take any action to protect the interests of the banking sector despite a written complaint having been received and acknowledged on July 26, 2016. Why did the government and all its authorities including the Fince Ministry, its fincial intelligence units totally fail to prevent such crimils from fleeing from the country? Whenever there have been instances of massive frauds perpetrated by crimils with excellent connections at high levels, the administration has consistently failed to prevent such crimils from leaving the country at their will. In fact, one gets the impression that there are senior officers in the corridors of power who have a vested interest in ensuring that the major economic offenders of the country should have no difficulty at all in fleeing the country as soon as their misdeeds are discovered.
In its origil complaint filed with the CBI, the Punjab tiol Bank had med three firms—Diamonds R Us, Solar Exports and Stellar Diamonds—and its four partners, including Nirav, and accused them of trying to gain fincial advantage through these fraudulent transactions. The other partners were Nirav’s wife Ami, brother Neeshal and uncle Mehul Choksi, who owns Gitanjali Gems. The two bank officials med in the FIR were Gokul th Shetty, who retired as deputy mager of the Punjab tiol Bank last year, and a junior officer, Manoj Hanumat Kharat. In any case, the PNB officers involved should have been only too aware of their fiscal folly considering that the estimated scale of the fraud Rs 11,000 crore is more than eight times PNB’s net profit of Rs 1,325 crore in the fincial year ended March 2017. It is expected that the crisis that the PNB has got itself into will impact the bank’s profitability this year. This should be evident from the fact that the PNB stock plunged 9.8 per cent to close at Rs 145.80 on the Bombay Stock Exchange on Wednesday. At a time when there is so much concern about non-performing assets of banks, the antics of a few PNB officers should serve to explain that non-performing assets can also arise from the antics of putting the ambitions of scheming customers above the interests of banks and their shareholders.