india

Updated: Dec 20, 2018 11:42 IST

The Central Bureau of Investigation (CBI) on Wednesday got the custody of the 10 accused arrested in connection with an alleged Rs 9.09-crore fraud involving fraudulent letters of undertakings (LOUs) issued by officials of the Punjab National Bank (PNB) to directors of a private company.

The case is similar to the Nirav Modi-Mehul Choksi fraud involving the same bank. A special CBI court remanded the accused in CBI custody till December 21.

The CBI arrested eight officials of PNB — Sanjay Kumar Prasad, then head of PNB’s Brady branch office, and currently DGM at PNB in New Delhi; Amar Jadhav, Sagar Sawant and Manoj Kharat, the then single window operators; Bechu Bansi Tiwari, the then chief manager of the bank’s foreign exchange department; Yashwant Joshi, the then manager of the foreign exchange department; Prafful Sawant, the then officer of the department and Mohinder Kumar Sharma, the then chief internal auditor — on Monday and Tuesday.

The agency also arrested Ishwardas Agarwal and Aditya Rasiwasia, both directors of M/s. Chandri Paper & Allied Products Pvt. Ltd.

As per the CBI’s submission, the accused have issued fraudulent LOUs to the accused company — M/s. Chandri Paper & Allied Products Pvt Ltd —for wrongful gain. The LOUs were issued without the credit limit and no 110% margin was provided by the company.

The CBI has alleged that Kharat, in conspiracy with Rasiwasia and Agarwal, cheated the bank to the tune of Rs 9.09 crore by issuing two fraudulent LOUs. As per CBI counsel Om Prakash’s submissions before the court, Kharat issued the unauthorised LOUs by using the SWIFT ID in favour of two banks in Sydney in Australia and Antwerp in Belgium.

Kharat’s defence advocate Sandeep Bali however argued, “He [Kharat] has been arrested previously in the case and is currently out on bail. The investigation has been conducted by the CBI, so there is no necessity of him being re-arrested. The entire case is based upon documents which are in CBI’s custody. There is also no monetary gain for him as he was appointed as a clerk and was only performing duties based on instructions given.”

The CBI also alleged that Tiwari did not ensure the implementation of the Foreign Exchange Circular and abused his official position as a public servant. The central agency has accused Joshi of not monitoring SWIFT transactions.