SFIO summons ICICI Bank, Axis Bank chiefs in PNB fraud case

Rahul Gandhi Congress

Congress President Rahul Gandhi

While Kochhar and Sharma did not appear in person before the SFIO, both banks sent their representatives.

Indian investigators have so far arrested almost 20 people, including some senior executives of companies owned by Modi and his uncle Mehul Choksi as well as high-ranking officials of the Punjab National Bank, in the bank fraud probe.

The CBI and the ED have registered FIRs to probe the case and intensified the crackdown on Nirav Modi and Choksi with the ED seizing jewellery and assets worth thousands of crores of rupees, the I-T department attaching various properties, and the CBI grilling several senior executives of his company.

In a related development, the Enforcement Directorate, which is also investigating the Rs. 12,600-crore PNB fraud case, has made a decision to send Letters Rogatory to over 15 countries against diamond jeweler Nirav Modi and Mehul Choksi.

In a statement to the stock exchange late on Tuesday, Axis said the SFIO had sought information from it on the accounts of Nirav Modi and Choksi's Gitanjali group of companies. While ICICI Bank is the leader of the consortium, Axis Bank had the largest exposure to PNB through the fraudulent LoUs, The Times of India reported.

A consortium of 31 banks had extended Rs5,280 crore working capital facility to Choksi's companies.

However, the government appeared to disclaim all prior knowledge about being warned of a potential scam, and continued to insist that PNB woke up to the fraud only on January 16 this year when the bank was approached with a "request to allow buyer's credit for making payments to overseas suppliers".

The jewelers are accused of getting letters of undertaking (LoUs) based on fraudulent claims from PNB, which bank officials did not enter in their internal software to avoid scrutiny.

The SFIO is an organisation under the Ministry of Corporate Affairs for detecting and prosecuting white-collar crimes and frauds.

Vipul Chitalia, Vice President in charge of banking operations at the Gitanjali Group - one of the jewelry firms named in the fraud - was detained at Mumbai airport on Tuesday for questioning, a CBI spokesman said.

With the widening of the probe, observers are expecting that even more instances of fraud by Indian corporates would come to light in the coming days.

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