Thursday, 17 January, 2019

Allahabad Bank CEO Usha Ananthasubramanian loses her executive powers

Billionaire jeweller Nirav Modi is at the centre of the over $2 billion PNB fraud Billionaire jeweller Nirav Modi is at the centre of the over $2 billion PNB fraud
Cary Erickson | 15 May, 2018, 22:25

Separately, two sources familiar with the matter said the Central Bureau of Investigation (CBI) had named Ananthasubramanian, diamond jeweller Nirav Modi, and more than 20 others in a charge sheet filed at a Mumbai court on Monday.

The PNB board on Monday divested its two executive directors, K V Brahmaji Rao and Sanjiv Sharan, of all financial and executive powers, Financial Services Secretary Rajiv Kumar said.

Earlier on May 3, the Enforcement Directorate (ED) told the Delhi High Court that the affidavits filed by Modi's uncle and business partner Mehul Choksi's firm Gitanjali Gems in the court were 'false and misleading'. This includes credit given out against Letters of Undertaking and amounts under other credit facilities given to entities related to the Nirav Modi group.

Ananthasubramanian (57), was at the helm of PNB from August 2015 to May 2017 after serving as its Executive Director from July 2011 to November 2013.

Nirav Modi, of course, will be named in the chargesheet. The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing an global messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB's internal banking software, thus bypassing scrutiny in the bank, they said.

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Group firms of Modi and Choksi secured loans from global branches of other banks based on letters of undertaking (LoU) issued by employees of PNB.

The agency has not given in detail the role of Mehul Choksi in the present chargesheet. She was questioned recently by the CBI in connection with the case. She is accused of not complying with a 2016 circular of the Reserve Bank of India on the Swift (Society for Worldwide Inter-bank Financial Telecommunications) system.

The CBI had filed three FIRs between January and March to probe the PNB fraud.

PNB was hit by a almost Rs13,000 crore scam allegedly perpetuated by jewellers Nirav Modi and Mehul Choksi in connivance with some bank employees. The fraud was allegedly perpetrated despite the circulars issued by RBI, which was in the knowledge of senior officials of PNB. PNB share price has fallen 47.6 percent so far this year. Gokulnath Shetty, who was the deputy manager at PNB's Brady House branch, allegedly continued to issue fraudulent LoUs for seven years even after being warned by the RBI. "Reconciliation of SWIFT (Society for Worldwide Inter-Bank Financial Telecommunication) messaging system CBS was not done despite repeated caution notices of the RBI", a CBI official said.