Continuing its probe into the Rs 11,300 crore fraud associating diamond merchant Nirav Modi and his uncle Mehul Choksi, CBI has arrested a general manager-rank official of Punjab National Bank.
Rajesh Jindal, posted as GM (credit) at the bank’s head office in New Delhi, was head of the Brady House branch in Mumbai from 2009 to 2011 when the practice of issuance of letters of undertaking (LoUs) without sanctioned limits to the Nirav Modi group began.
He was picked up late on Tuesday night and produced before a special CBI court in Mumbai on Wednesday along with five other accused, including Vipul Ambani, a senior executive in one of Nirav Modi’s companies.
CBI told the court that seeks at the office of Ambani had yielded applications of the fraudulent LoUs made to the bank by three of Modi’s firms. This, CBI said, proved that Ambani had knowledge of the fraudulent transactions. The agency also said that Ambani, in his capacity as president, finance, Firestar Group of Companies, would not only visit and meet PNB officials at the Brady House branch, but also at the circle and zonal offices in the city and the head office in Delhi.
The court remanded Jindal, Ambani and the others to CBI custody until March 5. They included Kavita Mankikar (Modi’s executive assistant and authorised signatory of three accused firms), Arjun Patil (senior executive, Firestar Group), Kapil Khandelwal (CFO, Nakshatra group and Gitanjali group) and Niten Shahi (manager, Gitanjali group).
The investigative agency has registered two separate FIRs in the case and most of the accused are common.
The accused were produced before special judge SR Tamboli around 4pm. Special CBI prosecutor A Limosin told the court that although the Firestar Group of Companies was not named in the FIR, Ambani being component of the head of finance department of some Modi-owned companies from May 2013 to November 2017, and later in his capacity as president “was fully aware of the fraudulent and illegal LoUs which were being issued by (arrested accused) Gokulnath Shetty, retired deputy manager of PNB, in conspiracy with and guidance of Modi”. CBI said this was revealed during the examination of Mankikar, Ambani and Patil.
When asked who was preparing and maintaining the books of accounts of the Modi owned firms — Diamond R US, Solar Exports and Stellar Diamonds — in whose names the applications for the fraudulent LoUs were made, Ambani failed to offer any answer or denial that he was not seeing into the affairs of the firms, CBI said.
Elaborating on the roles of the others, the prosecution said that while Mankikar had signed the applications for the LoUs, Patil prepared the applications. It purported that during his tenure as branch manager at the Brady House branch from 2010 to 2011, he had permitted Shetty to continue issuing LoUs without following existing banking procedure and guidelines.
CBI said that the accused were not cooperating with investigations and not being able to give reasonable explanation for not blowing the lid off the scam.
Gitanjali Gems Ltd employee Shahi would fabricate LoU applications and related documents and hand them over to Shetty, CBI claimed. Although he admitted during questioning that he prepared the documents, Shahi claimed that he did so at instance of the company vice-president Vipul Chatalia. CBI said that he was evasive on what was done with the documents once the transactions were completed.
The prosecution submitted that Khandelwal was responsible for the total financial management of the company and was reporting to Choksi. It claimed that he was privy to all the transactions.
Ambani’s lawyer Amit Desai said that his client had no connection to the firms involved in the case, and so far as Firestar was concerned, there were no allegations of illegalities against it.
Defence advocates Vijay Aggarwal and Yashwardhan Tiwari for the lone woman accused, Mankikar, termed her arrest a contravention of the law as it was made at 8 pm on Tuesday. Aggarwal said that the law prescribes that women can only be arrested before sunset. Jindal’s defence said that it was Shetty who manufactured all the documents and that they were never put up before him, and hence he could have never had an opportunity to consider or sanction it.
While granting custody, the court said that in case of Mankikar there was no breach of law and pointed out that her husband was current during her arrest.
Meanwhile, CBI on Wednesday sealed Nirav Modi’s 1.5acre Alibaug farm house which also includes a 12,000sqft bungalow.
The bungalow, ‘Roapanya’, was searched on Tuesday after documents pertaining to its ownership were recovered during raids. The farm house was reportedly purchased by Modi in 2004 for Rs 32 crore, said sources. ED is likely to take custody of the property later.
CBI claimed that it had no knowledge of Modi’s whereabouts or if he had acquired passport of any other country.