PNB appoints forensic auditor to assess Nirav Modi fraud

Punjab National Bank (PNB) has appointed Belgium-based consultancy firm BDO as forensic auditor for five of Nirav Modi Group companies as the $2-billion banking fraud seemed to mount further.

Besides, more than two dozen banks have decided to seek a forensic audit to establish if Mehul Choksi-led Gitanjali Gems has also indulged in fraud.

PNB issued a formal appointment letter to the Belgium-headquartered audit firm yesterday, sources said.

"It shall be our endeavour to exercise every bit of diligence in executing this assignment, given its sheer scale and complexity. It will be our responsibility to deliver the same within the required time frame in the larger national interest and that of banking industry in particular," BDO India Partner and Head - Risk and Advisory Services Kartik Radia said in a statement today.

The move comes after PNB found more unauthorised transactions related to jewellers Nirav ModiI and his uncle Mehul Choksi.

On 14 February, PNB had disclosed the fraud wherein Modi and his associates allegedly acquired fraudulent letters of undertaking (LoUs) from its Brady House branch in Fort area for overseas credit from other lenders.

Earlier this week, PNB had said the amount of unauthorised transactions could go up by more than Rs1,300 crore from earlier estimate of Rs11,400 crore.

The state-run PNB has the highest exposure to Mehul Choksi' Gitanjali Gems of about Rs1,000 crore while private lender ICICI Bank, also the lead bank in the consortium, has an exposure of over Rs600 crore.

ICICI Bank, however, said it has an exposure to Gitanjali, but not to firms promoted by Nirav Modi, who is the alleged kingpin of the nearly Rs13,000-crore fraud.

Meanwhile, the revenue department on Wednesday issued a Blue Corner notice against diamond jeweller Nirav Modi and his uncle Mehul Choksi of Gitanjali Group in connection with the Rs12,600-crore Punjab National Bank (PNB) fraud.

An Income Tax department official said the Blue Corner notice, which is intended to locate, identify or obtain information on a person of interest in a criminal investigation, was issued by the Bureau of Immigration against the two which will be valid for a year starting 22 February at all ports of embarkation.

The IT official also said that it has attached four more properties of the Nirav Modi group, which include his farm house in Alibaug of Maharashtra worth Rs13 crore and a 5.24MW solar power plant over 135 acres of land in Ahmednagar worth Rs70 crore, as per the books.

The official also revealed that they have attached 34 more bank accounts and fixed deposits of the Gitanjali Group having a balance of Rs1.45 crore.

Meanwhile, Nirav Modi has refused to cooperate in the probe by the Central Bureau of Investigation (CBI) stating that he cannot join the probe as he has pending business matters to attend to abroad.

The agency again wrote to him to immediately approach the high commission of the country where he is currently present and ensure his return as soon as possible.

"He has been given time to join investigation till next week," he said.