LoU fraud: CBI opposes plea seeking to make Punjab National Bank accused

MUMBAI: Punjab National Bank (PNB) was a victim of the alleged fraud committed by fugitive jewellers Nirav Modi and Mehul Choksi and not a beneficiary, the Central Bureau of Investigation (CBI) has told a court here.

The Central agency's reply came in response to an application filed by Nitin Shahi, a former assistant finance manager with Choksi's Gitanjali Group, who is one of the accused.

In his plea, Shahi, who is out on bail, contended that PNB too should be made an accused in the case.

The nationalised bank had earned commission from the alleged fraudulent transactions and it can not play the victim card and feign ignorance now, Shahi said.

Top-level officials of Gitanjali Group as well as PNB have been made accused, but not the bank itself, which is "strange and discriminatory", the plea said.

The CBI refuted the argument in a reply filed before special judge J C Jagdale here earlier this week.

It said the bank had suffered a loss of whopping Rs 7,080 crore in the transactions related to Gitanjali Group alone.

"Gitanjali Group is beneficiary of the transactions, while PNB is a victim which lost money," the CBI said.

The judge is expected to hear Shahi's plea next week.

Nirav Modi and his uncle Mehul Choksi are among the main accused in the scam which is pegged at about Rs 13,000 crore.

They managed to flee the country in the first week of January 2018, days before PNB could detect the fraud which centred around misuse of Letters of Undertaking (LoU) for obtaining credit from overseas branches of Indian banks.