The $2 billion fraud at Punjab National Bank (PNB) has shaken India’s financial sector. Here’s a timeline of t he development in the case
A $2 billion fraud at India’s second-biggest state-run lender Punjab National Bank (PNB) has shaken the nation’s financial sector, triggering a massive probe and regulatory changes. The following is a timeline on PNB fraud developments:
29 January 2018
■ PNB files police complaint against jewellers Nirav Modi, Mehul Choksi and others, saying they had colluded with two of its staff to defraud PNB of Rs280 crore.
5 February 2018
■ Central Bureau of Investigation (CBI) says has launched a probe into the alleged scam. Bank tells stock exchange it is still investigating the extent of the fraud.
14 February 2018
■ PNB now discloses the amount involved in the fraud as $1.77 billion, or Rs11,400 crore, adds other banks overseas advanced money to jewellers based on the fraudulent guarantees issued by its staff.
15 February 2018
■ PNB chief executive Sunil Mehta holds news conference, says working with law enforcement agencies, regulators, other banks. CBI says Modi, Choksi left India before PNB filed complaint.
16 February 2018
■CBI files case against Choksi’s Gitanjali Group, conducts searches at 20 of the jewellery retailers locations.
■ PNB CEO tells analysts bank putting in place better checks and balances, hopes to recover within six months.
■ The Reserve Bank of India says will take appropriate supervisory action.
■ State-run Union Bank Of India says it has exposure of about $300 million related to the PNB fraud, while State Bank of India says its exposure is about $212 million.
17 February 2018
■ CBI makes first arrests in the case, two PNB employees and an executive of Nirav Modi’s group detained.
■ State-run UCO Bank says it has about $412 million in exposure to fraudulent transactions carried out at PNB.
■ Enforcement Directorate seizes a cumulative Rs56.74 billion worth of diamonds, gold and jewellery from Nirav Modi’s home and offices.
19 February 2018
■ CBI arrests three more PNB executives in relation to the PNB fraud.
20 February 2018
■ PNB shares fall for fifth trading session, wiping off $1.9 billion in market capitalisation.
■ Finance minister Arun Jaitley slams oversight lapses, without directly referring to the PNB fraud case.
■ RBI asks banks to implement measures to strengthen their oversight of the SWIFT interbank messaging platform.
■ Jeweller Modi’s lawyer denies wrongdoing by client; Modi writes to PNB saying his companies owe much less than the sums reported.
■ ED says investigating more than 100 shell companies allegedly used by Modi and Choksi to route funds.
■ CBI arrests three officials from Modi’s group, two from Gitanjali.
21 February 2018
■ CBI arrests PNB general manager Rajesh Jindal, who headed the bank’s Brady House branch in Mumbai between August 2009 and May 2011.
■ Jeweller Modi writes to his employees in India saying they should look for other jobs as he would not be able to pay them salaries after the seizure of his assets.
22 February 2018
■ ED seizes nine luxury cars belonging to Modi and his firms; freezes shares and mutual funds worth Rs78 million held by Modi and Rs867.2 million held by Choksi.
23 February 2018
■ Auditor group Institute of Chartered Accountants of India begins probe into PNB fraud.
■ RBI orders linking of SWIFT system with banks’ core accounting software by 30 April, among other measures, 20 February letter to banks shows.
■ Bollywood star Priyanka Chopra announces cutting ties with Nirav Modi’s brand.
24 February 2018
■ Choksi writes an open letter to employees of Gitanjali Gems protesting innocence and telling them to look for other jobs.
■ ED seizes 21 properties including a farmhouse, a solar power plant and land belonging to Modi worth Rs5.24 billion.
27 February 2018
■ PNB says the amount of fraudulent transactions has gone up by about $204 million to $1.97 billion, or Rs12,636 crore.
■ Jeweller Modi’s firm Firestar Diamond files for bankruptcy in the United States.
28 February 2018
■ CBI arrests former PNB auditor M.K. Sharma, who was responsible for auditing systems and practices of the bank’s Brady House branch.
1 March 2018
■ PNB appoints BDO India as forensic auditor for five group companies belonging to Modi.
■ CBI arrests another former PNB internal auditor, Bishnubrata Mishra, who was responsible for audits at the branch between 2011 and 2015.
3 March 2018
■ Authorities say gold and diamond bribes given to one PNB staffer named in the fraud.
■ State-run lender Allahabad Bank says its exposure to the fraud is about $367 million.
4 March 2018
■CBI makes four more arrests—two former employees of Modi’s Firestar International, an auditor of Modi’s group and a former director of one of Choksi’s companies.
6 March 2018
■ CBI arrests a vice president of Gitanjali group.
■ Serious Fraud Investigation Office (SFIO) meets executives from Axis Bank, ICICI Bank over Modi, Choksi exposure.
7 March 2018
■ PNB CEO Sunil Mehta meets SFIO officials in Mumbai.
8 March 2018
■ Choksi accuses investigating agencies of gross abuse of due process in the PNB fraud investigation, says impossible for him to return to India and join the probe due to the suspension of his passport and ill-health.
CBI issues fresh summons to billionaire jeweller Nirav Modi and his uncle Mehul Choksi to join the PNB fraud investigation as early as possible and made it clear to the duo that they were “obliged” to cooperate.
(Reuters)