Corporate Fraud

Punjab National Bank scam: Congress, BJP blame each other for Nirav Modi’s alleged fraud

Congress President Rahul Gandhi said the billionaire diamond merchant had used his clout with Prime Minister Narendra Modi to flee India.

The Congress and the Bharatiya Janata Party on Thursday blamed each other for alleged fraudulent transactions at the Punjab National Bank worth around Rs 11,000 crore. The Central Bureau of Investigation had said on Wednesday that the bank had filed two complaints against billionaire jewellery designer Nirav Modi and a jewellery firm for the fraudulent transactions.

Congress President Rahul Gandhi tweeted that Nirav Modi’s “guide to looting India” was to “hug [Prime Minister] Narendra Modi, be seen with him at Davos [the venue of the annual World Economic Forum]”, and then “use that clout to steal Rs 12,000 crore and slip out of the country like [liquor baron] Vijay Mallya while the government looks the other way”.

Congress spokesperson Randeep Surjewala asked whether somebody in the Narendra Modi government “tipped off” Nirav Modi to leave the country. “Has it become the norm to let people run away with public money?” Surjewala asked.

“How can Nirav Modi and [his business partner] Mehul Choksi defraud the entire banking system through forged Letters of Understanding under the nose of the Modi government?” Surjewala asked in a press conference later. “Who is responsible for the biggest bank loot scam?”

“On July 26, 2016, all papers regarding the complaints against Nirav Modi and one of his relatives were handed over to the prime minister,” the Congress spokesperson added. “The Prime Minister’s Office acknowledged the complaints and even asked the Registrar of Companies to take action. However, in the end the government could not do anything.”

‘Nirav Modi not part of PM delegation at Davos’

Union minister Ravi Shankar Prasad said the government will not spare any accused and will conduct a full inquiry into the case. “Assets worth Rs 1,300 crore have been seized and the passports have been revoked, along with circulating a look-out notice,” he told reporters at a press conference. “Those who have tried to derail the banking system will be punished regardless of their position in the institute.”

Prasad also clarified that Nirav Modi was not a part of the prime minister’s delegation at the World Economic Forum. He said the businessman was a part of the Confederation of Indian Industry’s delegations. There was no meeting between Nirav Modi and Prime Minister Modi, he added.

He said that many Congress leaders were also close to Nirav Modi and that the BJP had several photographs of Congress leaders with his business partner Mehul Choksi. “But we don’t want to stoop to that level,” he said.

The Union minister for Electronics and IT also took on the Congress for using words like “Chotta Modi” to refer to the billionaire. “The BJP takes strong offence to the language used. It is derogatory. The Congress is trying to degrade the prime minister just because Nirav Modi holds the same surname. This is shameful,” he said.

Union minister SP Shukla, meanwhile, blamed the erstwhile United Progressive Alliance government for the scandal. “If the Congress is making allegations, were they sleeping from 2011 to 2014?” the minister of state for finance told reporters. “They should have probed it. This government is taking cognisance of matters and investigating them. The UPA was a government of scams and established these scamsters.”

Defence Minister Nirmala Sitharaman also claimed that the scam was the result of the UPA government’s actions. She said action would be taken against those guilty.

Punjab National Bank Managing Director Sunil Mehta on Thursday said that the bank had first detected the fraud in 2011. On January 3, 2018, the bank got to know that two staffers were involved in unauthorised transactions. It then went to the Central Bureau of Investigation on January 29, and a First Information Report was registered on January 31, Mittal said.

The bank has the capability to resolve this matter and come out of it, and it would honour all its bona fide commitments to the stakeholders, Mittal added.

Earlier in the day, the Enforcement Directorate raided multiple locations related to Modi on the basis of the bank’s complaint. The agency’s teams conducted raids at three locations in Surat, four in Mumbai and two in Delhi

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