PNB scam: Choksi asks CBI how he is a security threat; top 10 developments

The Gitanjali Gems owner criticises India's investigating agencies, accuses them of abusing processes in probing the country's biggest banking fraud

Mehul Choksi, the fugitive uncle of Punjab National Bank (PNB) diamantaire Nirav Modi and accused of defrauding the Public Sector bank (PSB) of Rs 124 billion, has said it was "impossible" for him to return to India because his passport has been suspended. 

The owner of Gitanjali Gems criticised India's investigating agencies in a letter accusing them of abusing processes in probing the country's biggest banking fraud. In a letter dated March 7 and addressed to the Central Bureau of Investigation (CBI), Mehul Choksi asks rhetorically, 'How am I a security threat to India?'' 

Mehul Choksi's firm hit a 52-week low on the stock market on Thursday after the Enforcement Directorate (ED) attached assets worth Rs 12 billion belonging to Mehul Choksi. Furthermore, anti-fraud agency SFIO has recorded the statements of top banking executives from both the public and private sectors. 

Here are the top 10 developments with regard to the PNB scam:

1. Mehul Choksi writes to the CBI:

In a letter to the Central Bureau of Investigation (CBI), one of the lead agencies probing the alleged loan fraud, the jeweller said the seizure of his assets, bank accounts and the shutting down of all his offices in India has caused prejudice against him.

The March 7 dated letter, which was reviewed by Reuters, said investigating agencies were acting with a pre-determined mind and interfering with the course of justice.

"It is impossible for me to travel back to India. I wish to point out that the Regional Passport Office Mumbai has not given me any explanation as to why my passport has been suspended and as to how I am a security threat to India," Choksi said in a letter to the CBI, which is probing the alleged fraud.

2. CBI registers fresh case against Nirav Modi:  

The Punjab National Bank on Sunday filed a fresh complaint with the CBI alleging that three firms liked to diamantaire Nirav Modi's Firestar International- Solar Exports, Stellar Diamonds and Diamond R Us after spotting circular transactions between them. PNB also reported the same to the Reserve Bank of India (RBI)

The CBI, after examining the complaint, registered a fresh case against Nirav Modi for causing a loss of Rs 3.21 billion to PNB by availing different credit facilities between the years 2013 and 2017.

Firestar International finance chief Vipul Ambani and others among the top brass of the group have also been named in the latest PNB scam case.

3. How will you bring back PNB scamsters, Congress asks PM Modi:

The Congress on Thursday moved a motion in the Rajya Sabha demanding a discussion on the PNB scam. The party demanded a statement on the ongoing investigation in the PNB scam from Prime Minister Narendra Modi in both the houses of Parliament. Earlier, the Congress had also staged a protest near Mahatma Gandhi's statue in the Parliament.

4. Gitanjali Gems shares hit a 52-week low as ED seizes Mehul Choksi's assets worth Rs 12 billion:

Shares of Gitanjali Gems plunged further on Thursday and settled with losses of over 5 per cent after the Enforcement Directorate (ED) said it has attached 41 properties, valued at over Rs 12 billion, in connection with the PNB case.

Shares of the company slumped to hit a 52-week low of Rs 20.30.

This is the 12th straight session of fall for the stock.

5. The 80:20 gold import scheme

After Nirav Modi and Gitanjali fraud on PNB, the skeleton of the 80:20 gold import scheme restricting gold import announced by the United Progressive Alliance (UPA) government are beginning to tumble out. 

"There was a scheme 80:20 introduced in August 2013 and repealed in November 2014. On 16th May, 2014, the date of the declaration of results, the then finance minister gave 'aashirvaad' to seven private companies under 80:20 Scheme. One of those companies was Gitanjali," alleged Union minister Ravi Shankar Prasad on Monday. "Chidambaram & Rahul Gandhi must answer why was this passed on the day of results to benefit these seven private companies," Prasad said.

6. GJEPC notice to Nirav Modi, Mehul Choksi:

The Gem and Jewellery Export Promotion Council said it will suspend Nirav Modi and Mehul Choksi if the scamster duo dail to respond to its notices over the Rs 126 billion PNB fraud by 9th March. The council said small traders seeking loans worth few millions of rupees are facing immense hurdles after the scam. The council also said that it is in discussions with the finance ministry to enact stringent reforms regarding financial irregularities, so as to prevent more scams in the future.

7. Top banking officials talk to SFIO:

PNB managing director and CEO Sunil Mehta on Wednesday appeared before the Serious Fraud Investigation Office (SFIO) to record his statement in the nearly Rs 127 billion scam at the bank.

ICICI Bank chief Chanda Kochhar and Axis Bank's Shikha Sharma were also summoned by the anti-fraud agency in the bank fraud case.

8. Vigilance award for PNB:

The Punjab National Bank (PNB) has been awarded by the Central Vigilance Commission for timely clearance of disciplinary proceeding, an official of the corruption watchdog said.

PNB was in competition with four other entities in the category, but the scam-ridden PSB won on the back of its record of 92 per cent of cases initiated during 2016.

The second best performance was reported by the CVO of Indian Bank, with 56 per cent being finalised.

9. Nirav Modi no more a Forbes billionaire: 

Nirav Modi, who appeared in the list in 2017 with a fortune of $1.7 billion, has been excluded from the 2018 list. Forbes' website describes Modi as the founder of Firestar Diamond, "which claimed to have more than $2 billion in sales." The Saudi business magnate Prince Alwaleed Bin Talal too has been excluded.

10. Setback for rupee forward rates:

One-year rupee forward rates have crashed in the currency market as importers are compelled to buy dollars in the currency market to service their debts. The plunge that amounts to about 50 paise, implies the acute dollar shortage in the forwards market. While the 50 paise slide may not seem like a big setback, forwards move by only a few paise every day.