PNB fraud: Bank’s chief auditor failed to verify daily transactions, report about irregularities, CBI tells special court

While arguing for the custody, CBI counsel A Limosin contested, “The LoUs issued were not entered in the Core Banking Solution (CBS) system. As the Internal Chief auditor he was duty bound to verify daily transactions and should have taken a print out of the messages sent via SWIFT (Society for Worldwide Interbank Financial Telecommunication) and tallied it with the CBS. An internal circular by RBI mandates the same,” Limosin argued. “Due to the lapses on his part, higher authority couldn’t deduct the irregularity,” added Limosin. Also Read: ‘Don’t use bank scams as an excuse to privatise’

Defence counsel, however, contested that Sharma did not have access to the SWIFT messages and therefore could not verify the same. “The auditor had no access to the system (SWIFT) and therefore was unaware.”

While granting 13 days police custody, Special CBI judge SR Tamboli observed, “It prima facie appears that it was the duty of the auditor to tally the entries. The offence is with regard to a fraud of Rs 6,500 crore and therefore the Investigation Officer should get a fair chance to investigate the crime. Find out the nexus of the accused in connection with the crime. This is not possible without a custodial interrogation. This court has found substance in the reasons given in the application and thereby remands Sharma to police custody until March 13.”

In a related development, the Enforcement Directorate (ED) probing a case under the Prevention of Money Laundering Act (PMLA) against jeweler Nirav Modi and his uncle Mehul Choksi examined Punjab National Bank (PNB), MD and CEO, Sunil Mehta for over seven hours. Mehta, at two earlier occasions, was examined by the CBI, this is the first time he was examined by the ED.

The ED also attached 41 properties belonging to Mehul Choksi worth Rs 1,217.20 crore in connection with its money laundering probe. The attached assets include 15 flats and 17 office premises in Mumbai, one shopping mall in Kolkata, one farmhouse in Alibaug, and 231 acres land in Maharashtra and Tamil Nadu, M/s Hyderabad Gems SEZ in Andhra Pradesh has also been attached. Also Read: ED attaches assets worth Rs 1,217 crore of Mehul Choksi, examines PNB director

While the ED is probing the money laundering aspect of the case, the CBI is probing the alleged criminal conspiracy and the misuse of office by public officers. The ED’s probe is based on the predicate offences registered by the CBI. Two FIRS have been registered by the CBI – one against Modi and his firms and second against his uncle Choksi and his companies. On Thursday, the CBI told the court that the fraud is now pegged at over Rs 12,000 crore.

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