All the properties linked with billionaire businessman Nirav Modi were searched and the assets were attached, PNB asked for a repayment plan from the accused in the INR 11,300 crore Letter of Undertaking scam. The Enforcement Directorate conducted a number of searches at various premises of Nirav Modi and Gitanjali Gems across India and seized his assets worth INR 5,100 crore. The searches were conducted at four locations in Mumbai, two in Surat and three in New Delhi. Further investigations are underway to check if there is some round tripping of the funds as was attempted.
Few stock brokers have been questioned in order to ascertain whether the owner of Gitanjali Gems, Mehul Choksi has defaulted in the payments to stock brokers. The premises of senior bank executives were also searched. The CBI has questioned officials of PNB but not made any arrests yet. The CBI also sealed the residence of Ami Modi, wife of Nirav Modi in Worli, Mumbai. Further, they also seized 95 documents which include import bills and applications.
PNB Managing Director said Nirav Modi has not given any concrete repayment plan yet and only gave some vague offers. The scam has taken a political turn with the opposition attacking the government. Following searches at his properties, assets worth 1,300 have been seized, their passports have been revoked and a look out notice has been issued. It is believed that the scam had its origins in 2011 and came to light in January 2018 when the customer came to the bank to renew the LoU. This LoU was not entered into the system of PNB and they approached the CBI on 29th January and filed an FIR on 30th January.
The chief of PNB also confirmed that most lenders who accepted the LoUs were overseas branches of the Indian banks and this was only one pure play foreign lender. The bank asserted that they will protect the financial interests of the lenders. It is in discussion with other stakeholder banks and the total credit exposure stood at INR 1,700 crore.
The exact liability of PNB will only be known after the investigations were complete. The Bank contended that those banks that had advanced money to Nirav Modi firms did not follow the international practices in confirming the LoU. These banks will have to bear some responsibility. How the case unfolds, only time will tell.