PNB rejects Mehul Choksi’s allegation of filing ‘malicious case’

Hindustan Times
Dated: March 28, 2019
Rajeev Jayaswal 

Punjab National Bank (PNB) has rejected fugitive billionaire Mehul Choksi’s allegation that the bank’s chairman Sunil Mehta “instigated” PNB executives and created a “malicious case” against his company Gitanjali Gems Ltd and him without any “tangible” proof.
“All action taken by the bank against those involved in the fraud is as per the rules and regulations defined by law and is without any prejudice,” a PNB spokesperson said on Thursday. The diamantaire, who is absconding, is a co-accused in the ₹13,500-crore PNB fraud along with his nephew Nirav Modi.
PNB said that the investigating agencies are working on the case, which is currently subjudice. “The bank has and continues to provide full cooperation to all investigating agencies working on the matter,” it said.
The bank, however, chose not to comment on Choksi’s accusations. A statement issued by Choksi’s lawyers on Wednesday accused the chairman of PNB of falsely implicating the diamantaire. “Despite no tangible proof, the PNB authorities, instigated by a panic-stricken chairman, Sunil Mehta, created a malicious case against a high-profile target—Gitanjali Gems and its proprietor Mr Mehul Choksi,” the statement said.
Mehta did not respond to the query on the specific accusation made against him. “The bank’s actions are not against any individual,” a PNB executive said on condition of anonymity. The Wednesday statement issued by the lawyers of the accused said that Choksi was innocent as he was not a partner in any of the firms under the scanner of the investigative agencies for the biggest banking scam in the country.
“The basis of the raids was an old and dated Know Your Customer (KYC) document which had been submitted by Mr Choksi to the Punjab National Bank as far back as 1995. Mr. Choksi sought to correct the details of this KYC on several occasions. He was not a partner in any of the firms under scrutiny for the purported scam being investigated at that time. In fact, Mr Choksi quit all these firms way back in 2000,” the statement said.
The lawyers claimed PNB not only chose to ignore “repeated requests and calls” of Choksi to resolve the KYC issue but also made the “old and out of date KYC document” the basis of allegations. “For PNB, it was obviously a desperate attempt to save their own skin by diverting attention away from the role of the bank and the cracks in their own system of not having updated all relevant information in their central server their central reporting system to the Reserve Bank of India,” the statement said.
Choksi allegedly secured a passport from Antigua and Barbuda about two months before a case was registered to declare him a fugitive economic offender in January 2018. In its submission to the court, the Enforcement Directorate has said that Choksi fled the country to avoid arrest.
Choksi and his nephew Nirav Modi allegedly colluded with some employees of PNB to fraudulently secure guarantees against which they borrowed from overseas branches of mainly Indian banks. In its submission to the finance ministry, PNB said that the fraud escaped the notice of the inspection audit team of the bank even though it was going on from 2011. It was detected in the third week of January 2018. The bank immediately initiated an investigation and reported the fraud to the central bank. First information reports (FIRs) were lodged with the Central Bureau of Investigation (CBI) in late January.
By then, Choksi had fled. The bank filed complaints with the Enforcement Directorate on February 13, 2018 and with the Ministry of Corporate Affairs on February 19.

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