On Thursday, the CBI told a Special Court that Mohindra Kumar Sharma, Internal Chief Auditor of Brady House branch failed to verify the daily transactions and report the irregularities from November 2015 to July 2017. The CBI said, “Sharma in conspiracy with other co accused persons deliberately ignored to point out the issuance of illegal Letter of Undertakings (LoUs) and allowed Gokulnath Shetty (arrested accused) to open LoUs to favour the beneficiary private person i.e., Stellar Diamonds, Solar Exports and Diamond R’ US, which resulted in a huge loss to Punjab National Bank (PNB) to the tune of Rs. 6,498 crores.”
The CBI counsel A. Limson said the LoUs were not entered in the Core Banking System (CBS.) He further added Sharma should have verified the daily transactions and printed out the messages sent via Society for Worldwide Interbank Financial Telecommunication (SWIFT.) The defense lawyer countered stating his client did not have access to the SWIFT so he could not verify the fraud.
The Special CBI Judge S. R. Tamboli said, “It prima facie (facial expression) appears that it was the duty of the auditor to tally the entries. The offense 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.”
Yesterday, a Court ordered the Internal Chief Auditor (retired) of the PNB, Bishnubrata Mishra to be held in CBI’s remand till the 14th of March. Mishra was arrested yesterday in connection with the Rs. 12,700 crore PNB fraud. He is responsible for audits at the Brady House branch for the period 2011 to 2015. Mishra’s work was to audit the procedures and practices followed in the branch and report them.
Earlier this year, the PNB officials detected the use of fraudulent LoUs in one of their branches in Mumbai. Nirav Modi and his uncle Mehul Choksi, the two main accused of the PNB fraud fled India few days before the scam surfaced. The duo acquired fraudulent LoUs from PNB and used it for overseas credit from other Indian banks. The money laundered from the total number fraudulent transactions amounts to Rs. 12,700 crores.
