PNB Fraud: Banks Seek Forensic Audit Of Gitanjali Gems
Results of the audit will help lenders decide on how to treat the account--either as standard or otherwise.
More than two dozen banks have decided to seek a forensic audit to establish if Mehul Choksi-led Gitanjali Gems Ltd. indulged in fraud or not, bank officials said today.
A consortium of 31 lenders led by ICICI Bank Ltd., has an over Rs 6,000 crore exposure to the company, and appointed TR Chadha and Co. to determine if Gitanjali had indulged in any financial fraud, sources told PTI. Results of the audit will help these lenders decide on how to treat the account--either as standard or otherwise, they added.
The Gitanjali account is still a standard one in the books of the lenders, but Reserve Bank of India norms on classifying a fraudulent account require a different treatment, they said. PNB has the highest exposure to Gitanjali Gems at under Rs 1,000 crore, but ICICI Bank, the second largest with an exposure of over Rs 600 crore is the 'lead bank' in the consortium.
In a statement, the largest private sector lender today said it has an exposure to Gitanjali, but not to firms promoted by Nirav Modi, who is the alleged kingpin of the nearly Rs 13,000-crore fraud perpetrated at one of the branches of PNB.
It added that the bank's exposure to Gitanjali is for working capital and is not the highest among the lenders. On Feb. 14, PNB had disclosed the fraud wherein billionaire jeweller Modi and associates allegedly acquired fraudulent letters of undertaking from its Brady House branch in Fort area for overseas credit from other lenders.
In a BSE filing late last night, NPB had said the amount of unauthorised transactions could go up by more than Rs 1,300 crore.
Choksi is Modi's uncle and has also been found to be allegedly involved in availing of credit facilities through a similar modus operandi, the Central Bureau of Investigation said today. Both Modi and Choksi flew out of the country between Jan. 1 and 6, much before filing of the case by CBI.